Chemtrade Logistics Income Fund announced that it has entered into a definitive agreement to sell its Potassium Chloride (KCl) and Vaccine Adjuvants businesses to Vertellus, a manufacturer of specialty products for various consumer goods, food and agriculture, healthcare and industrial markets, for approximately US$155 million. The transaction is expected to close during the fourth quarter of 2021 and is subject to customary closing conditions.
Vertellus, a Pritzker Private Capital company, is acquiring businesses from Chemtrade that produce specialty ingredients essential in the efficacy of medications for hypertension and diabetes, production of next-generation biologics and improving the effectiveness of certain vaccines. The businesses, which had been classified as Assets Held for Sale in Chemtrade’s financial statements, are part of Chemtrade’s Water Solutions and Specialty Chemicals (WSSC) segment and are located in Midlothian, Texas (KCl) and Berkeley Heights, New Jersey (Vaccine Adjuvants).
“These are both good businesses, which have benefitted from our recent capital investment that expanded and upgraded both plants. As a strategic buyer, Vertellus will be able to add further value and will benefit from the skilled teams at both locations. We are confident that Vertellus and PPC will take the strong platform that we have built and make the businesses even stronger.”
-Scott Rook, President and CEO of Chemtrade
Chemtrade will use the net proceeds of the sale to reduce bank debt. Based upon the midpoint of guidance for 2021 provided by Chemtrade in August 2021, and after making a pro-forma adjustment for the loss of a full year’s EBITDA of the disposed businesses, this repayment will reduce Chemtrade’s senior Debt:EBITDA ratio by approximately 0.7 times.
Due to the anticipated timing of the closing of this transaction, the sale will not have a material impact on Chemtrade’s 2021 reported distributable cash after maintenance capital expenditures. These businesses generated approximately US$14.3 million of EBITDA during the twelve months ended June 30, 2021.
Chemtrade’s management and Board of Trustees thank the employees at Midlothian and Berkeley Heights for their dedication and their commitment to operational excellence and wish them well.
BMO Capital Markets is acting as financial advisor to Chemtrade in connection with the transaction.
About Chemtrade
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
About Vertellus
Headquartered in Indianapolis, The Vertellus group of companies was originally founded in 1857 as a manufacturer of niche specialty products. Today, Vertellus is one of the largest providers of unique specialty chemicals used in diverse applications, processes and market sectors, including personal care, healthcare, food & agriculture, performance coatings, paper additives, infrastructure and industrial specialties. With 1,000+ employees, Vertellus serves customers across the globe from 10 international manufacturing facilities. Vertellus is a Responsible Care® company.
About Pritzker Private Capital
Pritzker Private Capital partners with middle-market companies based in North America with leading positions in the manufactured products, services and healthcare sectors. The firm’s differentiated, long-duration capital base allows for efficient decision-making, broad flexibility with transaction structure and investment horizon, and alignment with all stakeholders. Pritzker Private Capital builds businesses for the long term and is an ideal partner for entrepreneur and family owned companies. Pritzker Private Capital is a signatory to the United Nations Principles for Responsible Investment (PRI).