Innospec Inc. (Nasdaq: IOSP) announced that it has acquired Chemsil Silicones Inc. and the Chemtec Chemical Co., from its private owners. Chemsil develops and markets silicone-based formulations to the personal care industry. Chemtec, which distributes a wide range of personal care ingredients, is focused on customers on the West Coast. The companies have combined sales of $40 million.
Commenting on the deal, Patrick Williams, president and CEO of Innospec, said: "Personal Care is the strategic core of our Performance Chemicals business, and we have been seeking to add to both the technology base and the geographical footprint of this business. We are delighted to acquire Chemsil, which brings complementary technologies to our current portfolio, and Chemtec, which provides us with a solid base in the important West Coast market. We expect the acquisition to be immediately accretive."
James Harrison, president of Chemsil and Chemtec, said, "Although we have been pleased with the growth of our companies over the past few years, we have concluded with our lead advisors CIM Partners that we needed to be part of a larger group to realize our ambitions to grow our presence in the US, and to market our technologies internationally. Joining Innospec provides us with the infrastructure and critical mass to accelerate that expansion and focus on future technologies."
Chemsil will become part of Innospec's Performance Chemicals business, which develops and markets a range of surfactants and emollients to the personal care industry. Chemtec will continue to operate as a key distributor in this market, offering a high level of customer service.
Bruce McDonald, vice president of Innospec Performance Chemicals in the Americas, added, "Chemsil products are a great complement to our existing product portfolio, and we look forward to providing our customers a wider range of products for these applications, making Innospec a more valuable supplier to this industry. Our strategy is to continue to invest in R&D and geographical expansion, to establish Innospec as an innovation leader in personal care."
The acquisition has been funded through the successful negotiation of an amendment and increase to the Company's existing revolving credit facility agreement from $100 million to $150 million. The secured facility remains available through to December 2016. In addition, the amendment allows the Company to request a further amount of up to $50 million to be committed by various lenders. Mr. Williams noted, "We are very pleased to complete this financing, which demonstrates the continued confidence of our banking group in our business prospects and acquisition strategy."