Georgia-Pacific Chemicals, a subsidiary of Koch Industries, has agreed to sell its pine chemicals business to specialty chemicals company Ingevity for $315 million.

The business manufactures and sells pine-based tall oil fatty acids, tall oil rosin and tall oil resin esters used in a variety of applications, including adhesives, cleaners, paints and coatings, inks, metalworking, mining, oilfield, packaging and rubber processing. About 90% of revenues are in North America with the majority of products produced at Crossett in Arkansas.

As part of the transaction, Ingevity will enter into several contract manufacturing arrangements for oilfield and mining products as well as a 20-year, market-based supply deal for crude tall oil.

Ingevity will not acquire the merchant crude tall oil or crude sulfate turpentine business, which will be retained and operated by Georgia-Pacific.

Georgia-Pacific’s president, Rick Urschel, said that although the pine chemicals business has been profitable, the sale to an established industry player was in the best interests of its customers and stakeholders.

Michael Wilson, Ingevity’s president and CEO, said both companies’ pine chemicals businesses are very complementary. “By combining the companies, we will have a stronger, more competitive pine chemicals business. Our performance chemicals segment has recently shown improvement. This acquisition will provide a strong platform from which we will accelerate profitable growth,” he said.

The acquisition will be accretive to earnings in the first year, and Wilson expects to derive approximately $11 million in net synergies, mostly as a result of optimizing production among the combined three chemical plants and lower transportation and logistics costs.

The transaction, which remains subject to regulatory clearance, is expected to close in late 2017.