Compass Minerals in Talks to Sell Itself

By Anirban Sen and Ernest Scheyder

(Reuters) – Compass Minerals is negotiating with private-equity firms about a potential sale, according to three anonymous sources. The company's shares have suffered after the failure of their lithium-mining project, currently valuing Compass at approximately $1.5 billion, including debt.

Based in Overland Park, Kansas, Compass has been collaborating with its investment bankers over the past few weeks to assess acquisition interest from several buyout firms.

The discussions are reportedly advanced, with a deal possibly being finalized in the next few weeks. However, sources caution that no agreement is guaranteed.

Shares of the company rose more than 30% on Friday following reports of these negotiations.

A spokesperson for Compass declined to provide any comments on the situation.

Compass Minerals produces salt for both transportation and food industries, alongside fire retardants and fertilizers.

The company became a target for acquisition after experiencing more than a 50% decline in share value this year up to Thursday's closing. Their lithium unit, responsible for electric-vehicle battery metal production for manufacturers such as Ford Motor (NYSE:F), was shut down, disappointing investors.

Earlier this year, plans were canceled to develop a significant lithium project in Utah due to strong regulatory opposition, citing potential environmental harm to the Great Salt Lake.

Furthermore, mild weather has adversely affected the company’s mineral salts business, as noted in their latest quarterly results. In May, Compass announced plans to reduce its debt and forgo dividends to conserve cash.

For the quarter ending June 30, Compass reported a slight decline in revenue to $203 million and a swing to a net loss of $43.6 million.