Canada's Chemtrade to buy chemicals and handling company Canexus for C$900 mn
16 December 2016
Canada's Chemtrade Logistics Income Fund, one of North America's largest suppliers of sulphuric acid and other chemical products, yesterday struck a deal to buy chemicals and handling company Canexus Corp for an enterprise value of about C$900 million ($675.22 million)
Chemtrade has offered to pay C$1.65 in cash per share, up from its earlier rejected offers of C$1.45 and C$1.50 a share.
The offer price is a 21-per cent premium to the closing price of Canexus on 13 September - the last trading day prior Chemtrade making its offer public.
The proposed acquisition, which has been unanimously approved by the board of Canexus, is structured as a Plan of Arrangement and is subject to regulatory and shareholder approval, as well as other customary closing conditions.
Toronto Stock Exchange-listed Canexus focuses on low-cost and sustainable chemical operations, produces sodium chlorate and chlor-alkali products, mainly used for the pulp and paper and water treatment industries.
The Calgary, Alberta-based company has 4 plants in Canada and two in Brazil.
Canexus also has a hydrocarbon transloading service for the oil and gas industry located at their Alberta terminal.
Chemtrade provides industrial chemicals and services to customers in North America and around the world.
The Toronto-based company is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide.
It is a leading regional supplier of sulphur, sodium chlorate, potassium chloride, and zinc oxide and also provides industrial services such as processing by-products and waste streams.
"The successful completion of the arrangement will strengthen and expand Chemtrade's existing platform while further diversifying our North American operations and allowing us to enter attractive South American markets," Chemtrade chief executive Mark Davis said in a statement.