Detrex Corporation and Italmatch Chemicals Group jointly announce that they have entered into a definitive agreement and merger plan (“Merger Agreement”) pursuant to which a new subsidiary of Italmatch Chemicals will acquire Detrex for $27 per share in cash.
Under terms of the agreement, dated November 10, 2017, each of Detrex's common shares outstanding before the merger will be converted and exchanged for the right to receive $27 in cash.
The consideration in the settlement represents an 8% premium over the closing price of Detrex common stock, as reported by the OTC Markets Group website on November 9, 2017, a 9% premium over the average price over the last 30 days ending November 9, 2017 and a premium of 16% compared to the average price of the last 90 days also ending November 9, 2017. The boards of directors of both companies unanimously approved this transaction.
Thomas E. Mark, President and CEO of Detrex, said, “After a thorough review, the Board has unanimously approved this proposed sale, which we believe maximizes value for our shareholders. On behalf of the Board, I would like to credit all of our employees for making Detrex and its operating subsidiary, The Elco Corporation (Elco), the success they are today." “Elco and Italmatch share the same high operational standards and have a similar corporate culture. The Board believes that it is a great opportunity for Elco to join an organization with more structured resources and a consistent operational dimension in the specialty chemicals sector. We look forward to promptly completing the transaction with Italmatch”.
“Italmatch Chemicals is a world leader in the production of special additives, with a turnover of 340 million Euros, a strong vocation for the market of additives for lubricating oils and a constant commitment to research and innovation. We have known Elco, its products and its Management for many years” said Sergio Iorio, Chief Executive Officer of the Italmatch Chemicals Group. “Elco will bring highly complementary products to the current Italmatch offer, will develop important commercial and strategic synergies, also from a geographical point of view. Italmatch Chemicals is in fact more focused on the EMEA markets, while Elco on the NA/LATAM area. Furthermore, from the point of view of the product portfolio, the complementarity between the two companies is optimal. Italmatch excels in the field of special synthetic basestocks and antiwear additives and Elco in EP additives and additive packages for applications with lubricating greases and metalworking, products often combined together. We believe that both companies share the same philosophy and the same propensity for innovation, and we are confident that we have a bright future together.”
The deal is expected to close by December 31, 2017 and is subject to the approval of the owners of at least two-thirds of Detrex's issued and outstanding shares, in addition to the satisfaction or waiver of the customary closing conditions. There are no financial conditions prior to completion of the proposed acquisition. The directors and major shareholders representing approximately 52% of the shares have agreed to vote in favor of this proposal, unless an improved proposal (as defined in the Merger Agreement) is received.
KeyBanc Capital Markets Inc. is acting as financial advisor to the Detrex Board of Directors and has provided the Board with a fairness opinion in relation to the transaction. Clark Hill PLC is assisting Detrex as legal advisor in relation to the proposed agreement. Italmatch is followed by Lincoln International as financial advisor and by Dykema Gossett PLLC and Giovannelli e Associati as legal advisors in relation to the transaction.
