Starboard urges Solstice to cut costs by about $100 million after building stake
Key Facts
Investment firm Starboard Value has built a stake worth several hundred million dollars in Solstice Advanced Materials and is seeking cuts of about $100 million in overhead costs, Investing reported, citing an October 2026 Financial Times report. The report cited people familiar with the matter as saying the investor was seeking to reduce overhead at the advanced materials company, a demand concerning the company's costs. The investment value cited in the report refers to the stake Starboard built in Solstice, while the expense reduction remains an investor demand. Solstice became independent of Honeywell following the completion of its spinoff on October 30, 2025, according to its filing with the U.S. Securities and Exchange Commission. The spinoff was carried out through a pro rata distribution of Solstice shares to the parent company's shareholders, according to the filing.
The investor's arrival followed Solstice's announcement that it had terminated its agreement to acquire Element Solutions by mutual consent, according to a company statement. Solstice said in its statement terminating the agreement that neither party would owe termination fees as a result of the deal's cancellation. In the August 2026 announcement, the board authorized share repurchases of up to $500 million. When announcing the agreement's cancellation, Chief Executive David Sewell affirmed the company's confidence in its strategic plan and its respect for shareholders' views on its direction. "We have great confidence in our strategic plan and respect the views of our shareholders," Sewell said, according to the statement, in remarks accompanying the termination of the acquisition and the announcement of the share repurchase authorization.
On operating performance, Solstice reported net sales of $1,148 million in the second quarter of 2026, according to its earnings statement for the period. That represented an increase of 11% from the same quarter a year earlier, according to the year-on-year comparison the company provided in its earnings announcement. Solstice attributed its organic sales growth to higher volumes and improved pricing, the two factors the company identified to explain growth in this measure. The company described these drivers in its statement as "volume growth and improved pricing" when presenting its second-quarter organic sales performance. In its refrigerants business, sales rose 13% year on year during the same period, according to the details Solstice published on its business performance.
Despite the sales growth, Solstice's adjusted earnings before interest, taxes, depreciation and amortization margin declined in the second quarter of 2026, according to the earnings statement. The margin stood at 25.3%, down 218 basis points from the same period a year earlier, according to figures announced by the company. Corporate expenses totaled $54 million during the same quarter, an item Solstice presented in its quarterly financial results alongside sales and profitability measures. Starboard's demand concerning overhead costs comes after those results, with its requested cost reduction amounting to about $100 million, according to the report citing people familiar with the matter. Nuclear business revenue rose 27% year on year alongside this quarterly performance, according to Solstice's second-quarter earnings statement.
As background to the nuclear business's performance, Solstice announced a plan in February 2026 to expand its uranium conversion business, with an associated order backlog worth more than $2 billion. The company described those orders at the time it announced the expansion plan as "exceeding $2 billion," according to its statement on the nuclear business. Solstice carries out the uranium conversion stage to produce uranium hexafluoride, which then passes to other parties in the nuclear fuel manufacturing chain. Other parties enrich the uranium hexafluoride produced by the conversion process, according to the company's description of the division of responsibilities among service providers in this chain. Those parties also manufacture the material into nuclear fuel after enrichment, according to the explanation Solstice provided in its announcement of the conversion business expansion.
In its February announcement, Solstice forecast that uranium hexafluoride production at its Metropolis Works plant would exceed 10 kilotonnes during 2026, as part of its production outlook for that year. That level refers to the plant's expected output, according to the company's estimate when it announced its uranium conversion expansion plan, before reporting results for subsequent periods. On upcoming disclosures, Solstice set November 4, 2026, as the date for announcing its third-quarter financial results, according to its earnings date statement. The results will be released before the market opens that day, according to the timing the company announced for publishing its financial performance for the period. Solstice also scheduled an earnings call for November 4, 2026, at 8:30 a.m. Eastern Standard Time, according to its published investor events calendar.