WestRock Completes Ingevity Spinoff, Ingevity Trades Under NGVT Symbol

It took years and featured a number of delays, but WestRock (WRK) finally completed the spinoff of its specialty chemicals business, Ingevity (NGVT). The new company began trading on the NYSE today and shareholders should have received one share of NGVT for every six shares of WRK owned. As usual, executives are excited about the future prospects and here is Ingevity’s President & CEO Michael Wilson talking about the transaction:

We are excited about the opportunities that being a standalone company will provide us…For the past 100 years, our business has been part of larger paper and packaging companies. Now, as an independent company, Ingevity will have the strategic flexibility and financial resources to pursue multiple avenues of growth. We are poised to build upon our legacy of innovation and success and look forward to driving profitable growth and creating value for our new shareholders.

For additional information on the spinoff, there are a couple of investor presentations on the website which give a good introduction to the company and of course, the most recent Form 10 is a must read.

Post-spinoff, Ingevity is set to join the S&P SmallCap 600 index:

Ingevity Corp. (NYSE:NGVT) will replace Rex Energy Corp. (NASD: REXX) in the S&P SmallCap 600 after the close of trading on Monday, May 16. S&P 500 constituent WestRock Co. (NYSE:WRK) is spinning off Ingevity in a transaction expected to be completed on Friday, May 13. Post spin-off, West Rock will remain in the S&P 500. Rex Energy is ranked near the bottom of the S&P SmallCap 600 and is no longer appropriate for that index.

It’s always worth noting whenever an S&P 500 company spins off a smaller entity as many holders, such as index funds and ETFs, could become forced sellers. Of course that is not a rule though and Ingevity was up over 4% during its first day of trading. Chemical spinoffs have been a bit of a mixed bag recently and there were some concerns from analysts about the wisdom of proceeding with this move in the current environment. Lets see if Ingevity can buck the trend.

Disclosure: Author holds no position in any stock mentioned.