Ingevity Corp (Form: 8-K, Received: 11/01/2023 16:21:21)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________

FORM 8-K

_______________________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

October 30, 2023

Date of Report (date of earliest event reported)

__________________________________________________________________________

INGEVITY CORPORATION

(Exact name of registrant as specified in its charter)

__________________________________________________________________________

Delaware

001-37586

47-4027764

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

4920 O'Hear Avenue Suite 400

North Charleston

South Carolina

29405

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: 843-740-2300

Not Applicable

(Former name or former address, if changed since last report)

_____________________________________________________________________________________________________


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	NGVT	New York Stock Exchange


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act		o

_____________________________________________________________________________________________________

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On November 1, 2023, Ingevity Corporation (the “Company”), and WestRock Shared Services, LLC and WestRock MWV, LLC, on behalf of the affiliates of WestRock Company (“WestRock”), entered into Amendment No.1 (the “Amendment”) to that certain Amended and Restated Crude Tall Oil and Black Liquor Soap Skimmings Agreement, dated as of March 20, 2023, by and between the Company and WestRock (the “Supply Agreement”).

Pursuant to the Amendment, the Company and WestRock agreed to, among other things (1) document the prior removal of WestRock’s mill located in Florence, South Carolina as a producer of products under the Supply Agreement and (2) modify the term of the Supply Agreement to end on June 30, 2024 unless the parties mutually agree to an extension thereof on or before April 30, 2024. The foregoing summary of the Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment filed as Exhibit 10.1 hereto and incorporated herein by reference.

ITEM 2.05. COST ASSOCIATED WITH EXIT OR DISPOSAL COSTS.

On November 1, 2023, the Company announced a number of strategic actions designed to further reposition the Performance Chemicals segment to improve the profitability and reduce the cyclicality of the Performance Chemicals business and the Company as a whole. These actions increase the Company’s focus on growing its most profitable Performance Chemicals businesses such as Pavement Technologies and accelerate its transition to non-crude tall oil (CTO)-based fatty acids. In connection with these actions, on October 30, 2023, the Board of Directors approved the permanent closure of the Company’s Performance Chemicals manufacturing plant located in DeRidder, Louisiana (the “DeRidder Plant”), as well as additional corporate and business cost reduction actions. The Company expects to close the DeRidder Plant by the end of the first half of 2024.

The Company expects to incur aggregate charges of approximately $280 million associated with these actions, consisting of approximately $180 million in asset-related charges, approximately $15 million in severance and other employee costs, and approximately $85 million in other restructuring costs including decommissioning, dismantling and removal charges, and contract termination costs. The Company expects approximately $180 million of the total charges to be non-cash. The majority of non-cash charges and 50-60% of cash charges are expected to be recognized by the end of the first half of 2024.

The charges the Company currently expect to incur in connection with these actions are subject to a number of assumptions and risks, and actual results may differ materially. The Company may also incur other material charges not currently contemplated due to events that may occur as a result of, or in connection with, these actions.

ITEM 7.01. REGULATION FD DISCLOSURE.

On November 1, 2023, Ingevity issued a press release related to the planned closure of the DeRidder Plant. A copy of the press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” “guidance,” “believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation, anticipated timing, charges and costs of the closure of our DeRidder, Louisiana plant; the potential benefits of any acquisition or investment transaction, expected financial positions, guidance, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; impact of COVID-19; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, charges, costs or actions, including adverse legal or regulatory actions, resulting from, or in connection with, the closure of our DeRidder, Louisiana plant; losses due to resale of CTO at less than we paid for it; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation and the Russia-Ukraine war and Israel-Gaza war; risks related to our international sales and operations; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient raw materials, or any material increase in the cost to acquire such raw materials; issues with or integration of future acquisitions and other investments; the provision of services by third parties at several facilities, including the impact of WestRock’s shutdown of its North Charleston paper mill; adverse effects from the COVID-19

pandemic; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (the “SEC”), including those described in Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s beliefs as of the date of this Current Report on Form 8-K. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this Current Report on Form 8-K.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.


Exhibit No.			Description of Exhibit
10.1			Amendment No. 1 to Amended and Restated Crude Tall Oil and Black Liquor Soap Skimmings Agreement, dated November 1, 2023, by and between WestRock Shared Services, LLC and WestRock MWV, LLC, on behalf of the affiliates of WestRock Company, and Ingevity Corporation.*
99.1			Press Release, dated November 1, 2023.
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

* The exhibits and schedules to such agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


INGEVITY CORPORATION
(Registrant)

By:			/S/ MARY DEAN HALL
			Mary Dean Hall
			Executive Vice President and Chief Financial Officer

Date: November 1, 2023

Exhibit 10.1

AMENDMENT NO.1 TO THE AMENDED AND RESTATED CRUDE TALL OIL AND

BLACK LIQUOR SOAP SKIMMINGS AGREEMENT

This Amendment No.1 (this “Amendment”) to the Amended and Restated Crude Tall Oil and Black Liquor Soap Skimmings Agreement, is made and entered into as of November 1, 2023 (the “Amendment Effective Date”), by and between WestRock Shared Services, LLC and WestRock MWV, LLC, on behalf of the affiliates of WestRock Company (“Seller”), and Ingevity Corporation, a Delaware limited liability company (“Buyer').

WHEREAS, Seller and Buyer previously entered into that certain Amended and Restated Crude Tall Oil and Black Liquor Soap Skimmings Agreement dated as of March 20, 2023 (the “Agreement”; capitalized terms used herein but not defined herein shall have the meanings given them in the Agreement); and

WHEREAS, Seller and Buyer desire to amend the Agreement as detailed below.

NOW THEREFORE, in consideration of the mutual premises and covenants contained herein and intending to be legally bound hereby, the Parties agree that the Agreement is amended as follows:

1.Amendment of Section 1(B). Section 1(B) of the Agreement is amended by deleting the

reference to “Florence, SC” in its entirety.

2. Amendment of Section 2. Sections 2(A), (B), (C), and (D) of the Agreement are amended

by deleting such sections in their entirety and replacing them with the following:

“2. TERM

A. This Agreement shall be effective for a period commencing on the Amendment Effective Date and ending on June 30, 2024 (the “Term”).

B. No later than April 1, 2024 and to be completed on or before April 30, 2024, the Parties shall enter into discussions regarding a potential extension of the Term and the Purchase Price and Product quantities during such extension. If the Parties agree to such terms, the Parties shall amend this Agreement accordingly.

3. Amendment of Exhibit B. The table in Exhibit B of the Agreement is amended by deleting the reference to “Florence, SC” and the accompanying information in such row of the table in its entirety.

4. Amendment to Exhibit C. Exhibit C of the Agreement is amended by deleting Exhibit C in its entirety and replacing it with the Exhibit C attached hereto.

5. Amendment to Exhibit D. Exhibit D of the Agreement is amended by deleting Exhibit D

in its entirety and replacing it with the Exhibit D attached hereto.

6. Continuing Effect. Except as expressly modified herein, all other terms and conditions of the Agreement will remain in full force and effect. All references in the Agreement to “the Agreement” or “this Agreement” shall be deemed a reference to the Agreement as amended by this Amendment. Furthermore, this Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. A signature sent by electronic or facsimile transmission shall be as valid and binding upon the Party as an original signature of such Party.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above.

INGEVITY CORPORATION

WESTROCK SHARED SERVICES, LLC

By:

/S/ JOHN C. FORTSON

By:

/S/ PETER ANDERSON

Name:

John C. Fortson

Name:

Peter Anderson

Title:

President and Chief Executive Officer

Title:

Chief Supply Chain Officer

Date:

November 1, 2023

Date:

October 30, 2023

WESTROCK MWV, LLC

By:

/S/ PETER ANDERSON

Name:

Peter Anderson

Title:

Chief Supply Chain Officer

Date:

October 30, 2023

Exhibit 99.1



						Ingevity Corporation 4920 O'Hear Avenue Suite 400 North Charleston, SC 29405 USA www.ingevity.com

News						Contact: Caroline Monahan 843-740-2068 media@ingevity.com

						Investors: John E. Nypaver, Jr. 843-740-2002 investors@ingevity.com

Ingevity announces further repositioning of its Performance Chemicals business, including the closure of its DeRidder, Louisiana facility, and additional company-wide cost reduction actions

•Company taking next steps in executing strategy that focuses on higher margin and higher growth specialty products, diversifies feedstocks, and optimizes manufacturing network

•Exiting certain commodity-oriented markets that are primarily rosin-based

•Reducing exposure to structurally more expensive crude tall oil (CTO) raw material that is being dramatically impacted by the biofuels market; company plans to sell excess CTO

•Closing DeRidder facility by the end of the first half of 2024

•Company will operate a dual CTO and Alternative Fatty Acid (AFA) refinery network to maximize profitability and reduce raw material cost volatility

•Total estimated business and corporate savings of $65-75 million, inclusive of approximately $35 million in savings previously announced, are expected to be fully realized in 2024

•Company expects to record charges associated with the DeRidder closure and restructuring of approximately $280 million, with approximately $180 million of the total charges to be non-cash

•Actions taken are expected to result in a steady state Performance Chemicals segment EBITDA margin of 15-20% and total Ingevity margin of 25-30%

•Company will continue to evaluate its portfolio and manufacturing network to drive the execution of its corporate strategy and maximize profitability

NORTH CHARLESTON, SC, Nov. 1, 2023 – Ingevity Corporation (NYSE: NGVT) President and CEO, John Fortson today announced a number of strategic actions designed to further reposition the company’s Performance Chemicals segment. “What we are doing today is an important step toward achieving our strategic objectives of improving the profitability and reducing the cyclicality of the Performance Chemicals business and the company as a whole,” said Fortson. “Today’s actions increase our focus on growing our most profitable Performance Chemicals businesses such as Pavement Technologies and accelerate our transition to non-crude tall oil (CTO)-based fatty acids (AFA). Our decision is the result of a careful evaluation of various strategic options to address the cyclicality of our rosin-based end markets, as well as the significant structural changes and elevated pricing of CTO due to the biofuels market. Going forward, we will continue to strengthen and diversify the Performance Chemicals business through the introduction and expansion of complementary and new product offerings based on alternative chemistries, such as soy and canola-based fatty acids.”

Today’s announcement includes the permanent closure of the company’s DeRidder, Louisiana, production facility that manufactures a range of CTO-based products that are primarily for the Industrial Specialties business, which is reported within Ingevity’s Performance Chemicals segment. Ingevity expects to close the DeRidder facility by the end of the first half of 2024. The company also announced additional corporate and business cost reduction actions, which combined with those previously announced, are expected to result in total annual savings of $65-75 million beginning in 2024.

As a result of the Performance Chemicals repositioning, Ingevity expects to incur aggregate charges of approximately $280 million, consisting of approximately $180 million in asset-related charges, approximately $15 million in severance and other employee-related costs, and approximately $85 million in other restructuring costs, which include decommissioning, dismantling and removal charges, and contract termination costs. The Company expects approximately $180 million of the total charges to be non-cash. The majority of non-cash charges and 50-60% of cash charges are expected to be recognized by the end of the first half of 2024.

Employees affected by today’s announcement include approximately 180 people at the DeRidder facility and approximately 120 people in business and support functions. Together with the actions taken earlier in 2023, headcount reductions represent almost 20% of Ingevity’s global workforce.

“We are committed to working with our customers to minimize any disruption caused by this decision and remain focused on offering a broader portfolio of products in the future,” said Ingevity senior vice president and president, Performance Chemicals, Rich White.

Fortson added, “Ingevity’s DeRidder operation played a key role in Ingevity’s history. Today’s announcement is a difficult but necessary step that the company must take as we continue to execute our strategic objectives to position Ingevity for long-term success. I want to thank all current and former employees for their service and commitment to Ingevity.”

The company will provide additional detail and commentary as part of its third quarter earnings webcast and conference call at 10:00 am ET on November 2, 2023. The webcast can be accessed here or on the investors section of Ingevity’s website.

Ingevity: Purify, Protect and Enhance

Ingevity provides products and technologies that purify, protect and enhance the world around us. Through a team of talented and experienced people, we develop, manufacture and bring to market solutions that help customers solve complex problems and make the world more sustainable. We operate in three reporting segments: Performance Chemicals, which includes specialty chemicals and pavement technologies; Advanced Polymer Technologies, which includes biodegradable plastics and polyurethane materials; and Performance Materials, which includes activated carbon. Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, pavement markings, publication inks, oil exploration and production and automotive components. Headquartered in North Charleston, South Carolina, Ingevity operates from 31 countries around the world and employs approximately 1,900 people. The company’s common stock is traded on the New York Stock Exchange (NYSE:NGVT). For more information, visit Ingevity.com. Follow Ingevity on LinkedIn.

About Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” “guidance,” “believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation, anticipated timing, charges and costs of the closure of our DeRidder, Louisiana plant; the potential benefits of any acquisition or investment transaction, expected financial positions, guidance, results of operations

and cash flows; financing plans; business strategies and expectations; operating plans; impact of COVID-19; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, charges, costs or actions, including adverse legal or regulatory actions resulting from, or in connection with, the closure of our DeRidder, Louisiana plant; losses due to resale of CTO at less than we paid for it; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation and the Russia-Ukraine war and Israel-Gaza war; risks related to our international sales and operations; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient raw materials, or any material increase in the cost to acquire such raw materials; issues with or integration of future acquisitions and other investments; the provision of services by third parties at several facilities, including the impact of WestRock’s shutdown of its North Charleston paper mill; adverse effects from the COVID-19 pandemic; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (the “SEC”), including those described in Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s beliefs as of the date of this press release. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this press release.