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Monday, November 20, 2017VOLUME 13 ISSUE 47
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Elco's Parent Detrex and Italmatch to Merge

Detrex Corporation, parent company of Cleveland, Ohio-based lubricant additive firm Elco Corporation, and Genova, Italy-based Italmatch Chemicals Group jointly announced last Wednesday that they have entered into a definitive agreement and plan of merger pursuant to which a newly formed subsidiary of Italmatch will acquire Detrex.

Under the terms of the Merger Agreement dated November 10, 2017, each share of Detrex common stock outstanding immediately prior to the merger will be converted into and exchanged for the right to receive $27.00 in cash. The Boards of Directors of both companies unanimously approved this transaction.

According to its website, Elco markets ZDDP, sulfurized EP, phosphorous/friction modifiers, corrosion inhibitors, antiwear agents and other components for making grease, antiwear hydraulic fluids, industrial gear oils, slideway oils and metalworking fluids.

From its website, Italmatch markets Ketjenlube®, a range of polymeric esters that provides excellent lubricating performance as well as low viscosity base fluid compatibility, as well as a range of complex and conventional esters, oleoesters (Dapralube® range), amide friction modifiers (Dapramid® range), succinic derivatives (Dapral®: ASA, PIBSA etc.) and a range of phosphorus derivatives both phosphite, phosphonate and phosphate esters (Dapraphos® range). Main application areas are: gear oil, MWF, greases, hydraulic oil applications and engine oils (2T as well as 4T). Italmatch Chemicals is the main European manufacturer of Phosphorus Pentasulphide (Pentasit®), a key raw material for the production of the widely used antiwear and antioxidant additives (ZDDP).

Thomas E. Mark, President and Chief Executive Officer of Detrex, said: “After thorough analysis, the Board has unanimously endorsed this proposed sale, which we believe maximizes value for our stockholders. On behalf of the Board, I would like to recognize our outstanding team of dedicated employees who have made Detrex and its operating subsidiary, The Elco Corporation (Elco), the success it is today. Elco and Italmatch share the same high operating standards and have a similar overall company culture. The Board believes this is a great opportunity for Elco to be a part of an organization with deeper resources and operational scale in the specialty chemicals business. We look forward to working with Italmatch to promptly complete the transaction.”

Sergio Iorio, Managing Director of Italmatch Chemicals Group, said: “Italmatch Chemicals is a leading global specialty additives company with 340 million Euros in sales and a strong focus and commitment, through R&D and innovation, on the industrial lube oil markets. We have known Elco, its products and Management Team for many years. Elco will bring highly complementary products, synergies and geographical aspects, as Italmatch is focused on EMEA markets and Elco on NA/LATAM markets, with sales and organizational synergies in other Regions. In addition, from a product portfolio point of view, Italmatch is a leader in special synthetic base stock and anti-wear additives, and Elco has a distinctive and very complementary position in EP additives and Ad-pack for grease and MWF. We believe both companies share the same spirit and interest for innovation and we are confident of a bright future together.”

The proposed merger is expected to close by December 31, 2017, subject to the approval by the holders of at least two-thirds of the issued and outstanding shares of common stock of Detrex and the satisfaction or waiver of customary closing conditions. There is no financing condition to complete the proposed acquisition. Directors and major shareholders representing approximately 52% of the shares have agreed to vote in favor of this proposal unless a Superior Proposal is received.

Detrex is a Michigan corporation that manufactures high performance specialty chemicals serving three distinct business areas; namely additives for industrial petroleum products, high purity hydrochloric acid for the semiconductor industry, and specialty chemicals.

Founded in 1997, Italmatch Chemicals is a leading innovative chemical group, specialized in performance additives for lubricants, water treatment, oil & gas and plastics. The group generates 340 million Euros in revenues and operates through six manufacturing plants in Europe (Italy, Spain, Germany and UK), four in Asia Pacific (China and Japan), two in North America (USA) and sales/distribution subsidiaries in Belgium, China, Japan, India, Poland, Singapore and the USA. Italmatch has over 500 employees.

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