Ingevity Sells CTO Refinery for $110M in High-Value Strategic Pivot

NORTH CHARLESTON, SC – January 05, 2026 – Ingevity Corporation (NYSE: NGVT) has officially completed the sale of its North Charleston Crude Tall Oil (CTO) refinery and a significant portion of its Industrial Specialties product line to Mainstream Pine Products, LLC. The all-cash deal, valued at $110 million at closing with up to $19 million in potential future payments, marks a pivotal moment for Ingevity as it aggressively streamlines its portfolio to focus on higher-margin specialty materials.

The divestment concludes a process outlined at the company’s investor event on December 8, 2025, signaling a deliberate exit from legacy CTO-based product lines. The move allows Ingevity to concentrate its resources on its core Performance Materials and Pavement Technologies segments. Additionally, the company announced it has initiated a process to explore strategic alternatives for its Advanced Polymer Technologies (APT) and Road Markings businesses.

A Strategic Shift to High-Value Materials

The sale is the cornerstone of a broader strategic plan designed to transform Ingevity into what company leadership calls a "best-in-class specialty materials company." By shedding the CTO refinery, which generates products with historically lower and more volatile margins, the company is sharpening its focus on businesses with stronger growth profiles and profitability.

“The completion of the sale of our CTO refinery assets and Industrial Specialties product line is an important step in our strategic plan to simplify and streamline our business,” said Ingevity President and CEO, Dave Li, in the company’s official announcement. “The Industrial Specialties business has played a meaningful role in Ingevity’s legacy, and we are confident it will continue to thrive under Mainstream’s ownership.”

Ingevity's refocused portfolio will now prioritize its core businesses: Performance Materials and Pavement Technologies. The Performance Materials segment, driven by its activated carbon products, is well-positioned to capitalize on the increasing global demand for air and water purification technologies, while Pavement Technologies continues to lead in roadway solutions. Concurrently, the company is seeking strategic alternatives for its Advanced Polymer Technologies and Road Markings segments to further streamline operations.

Finally, the Performance Chemicals segment, while smaller after the sale, will retain its high-performing Pavement Technologies business and certain lignin-based dispersant products, which were not part of the transaction with Mainstream. This curated portfolio is intended to deliver more consistent financial results and drive long-term shareholder value.

Reshaping the Financial Landscape

The financial implications of the transaction are significant for Ingevity. The immediate influx of $110 million in after-tax cash proceeds will be used to accelerate deleveraging, strengthening the company’s balance sheet and providing greater flexibility for future capital allocation, whether for internal investment or further strategic moves.

The divested assets were projected to generate approximately $130 million in revenue for 2025 but with EBITDA margins in the low-to-mid single digits. By removing this lower-margin business, Ingevity expects to improve its overall margin profile and reduce earnings volatility. The company reaffirmed its full-year outlook, excluding the transaction's impact, with expected sales between $1.25 billion and $1.40 billion and adjusted EBITDA of $390 million to $415 million.

Investors have responded positively to the strategic shift. Ingevity’s stock (NGVT) has gained over 50% in the past year and is trading near its 52-week high. Analysts see the move as a decisive step toward a more resilient business model. Following the initial announcement, BMO Capital raised its price target on the stock to $62, maintaining an "Outperform" rating and noting a potential inflection point for the company's earnings and free cash flow. While analysts note the company was not profitable over the last twelve months, they widely expect a return to profitability this year, bolstered by these strategic initiatives and aggressive share buybacks by management.

Mainstream's Expansion in Pine Chemicals

For the buyer, Mainstream Pine Products, LLC, the acquisition represents a major expansion. Founded in 2019, the Goose Creek, South Carolina-based company is focused on becoming a leading, low-cost producer of CTO derivatives in North America. This purchase of a fully operational refinery with an estimated fractionation capacity of 110,000-120,000 tons per year instantly scales its operations.

The acquisition allows Mainstream to consolidate its position in the Charleston area's growing pine chemicals hub. The company had previously announced plans for a new $90 million biorefinery in nearby Berkeley County, and this transaction provides it with established assets and immediate production capacity. Led by industry veterans, Mainstream aims to convert byproducts from the pulp and paper industry into high-performance, renewable ingredients for markets such as adhesives, lubricants, inks, and coatings.

The relationship between the two companies will continue beyond the sale. Ingevity and Mainstream have entered into several related agreements, including a supply contract where Mainstream will provide certain refinery products back to Ingevity to support its retained Pavement Technologies business. Ingevity will also provide operational services at the co-located North Charleston site and perform some manufacturing on behalf of Mainstream under a tolling agreement, ensuring a smooth transition and operational continuity.

Reflecting Broader Industry Transformation

Ingevity’s divestiture is not an isolated event but rather a reflection of powerful trends reshaping the entire specialty chemicals industry. Companies are increasingly moving away from commodity-based products and reorienting their portfolios toward high-value, sustainable solutions that meet evolving customer demands and stricter environmental regulations.

The push for a "greener" economy is fueling a boom in bio-based materials and green chemistry. The global crude tall oil market itself is growing, projected to expand at a CAGR of over 4% through 2035 as CTO is used to create eco-friendly alternatives to petroleum-based products, including biofuels. Mainstream Pine Products is positioning itself to directly capitalize on this trend.

Simultaneously, Ingevity's enhanced focus on activated carbon for purification and specialized pavement technologies aligns perfectly with the industry's pivot to high-performance, sustainable technologies. This strategic specialization is a common theme in recent chemical industry M&A activity, as corporations shed non-core assets to double down on their primary strengths and capture higher margins. By executing this sale, Ingevity not only streamlines its operations but also sharpens its narrative as a key player in the future of sustainable specialty materials, leaving the legacy CTO business to a focused specialist ready to carry it forward. The move ensures continued operation of the North Charleston refinery, preserving local industrial activity while allowing both companies to pursue their distinct strategic goals in a rapidly changing market.