Creating a global leader uniquely positioned in metalworking and primary metals platforms with deep expertise across attractive customer segments
Quaker Chemical Corporation and Houghton International Inc., companies with a combined 250-year history as providers of process fluids, chemical specialties, and technical expertise to the global primary metals and metalworking industries, have announced that they have executed a definitive agreement to combine the companies. Both Quaker Chemical and Houghton International are headquartered in the Philadelphia area.
“The proposed combination of Quaker Chemical and Houghton International represents the next phase of our evolution, and stays true to the vision of growing in our core specialties,” says Michael F. Barry, chairman and CEO of Quaker Chemical. “Joining forces with Houghton International combines two highly complementary businesses, each having a long history of building tremendous expertise, technology and customer-centric cultures dedicated to delivering long-term sustainable value to customers, shareholders and associates. The new company will capitalise on best practices and expertise from both businesses.”
Sanjay Hinduja, Chairman of Houghton International, which is owned by the Hinduja Group through its Gulf Oil business, says: “We are pleased to enter this agreement to unite these two distinguished and global companies. Together we will strengthen our capabilities and business models to better serve the global market and all our stakeholders.”
Under the terms of the agreement, Houghton International shareholders will receive $172.5 million of cash and 24.5 percent ownership of the combined company, representing approximately 4.3 million shares of newly issued Quaker Chemical stock. In addition, Quaker Chemical will assume Houghton International’s debt and cash, with net debt of approximately $690 million at year-end 2016. The agreement has been approved by both Quaker Chemical and Houghton International’s board of directors with full support of the Hinduja Group, which will become Quaker Chemical’s largest shareholder.
Houghton International and Quaker Chemical are both known for a commitment to innovation in a highly specialised and technologically demanding industry.
“In addition to our complementary businesses,” says Mike Shannon, CEO of Houghton International, “we are each committed to creating solutions for our customers through innovation, strong technical expertise and global reach with localised applications expertise.”
Combining Quaker Chemical’s and Houghton International’s product solutions and service offerings will allow the new company to better serve customers in the automotive, aerospace, heavy equipment, metals, mining, machinery, marine, offshore, and container industries. The business will have one of the world’s most expansive metalworking platforms comprised of specialty products that include removal fluids, forming fluids, protecting fluids, heat treating fluids, industrial lubricants and greases.
The expanded portfolio is expected to generate significant cross-selling opportunities and allow further expansion into growth markets that include India, Korea, Japan, and Mexico.
By combining resources, the new company will increase the breadth of its innovative technology, accelerate its product development initiatives and time to market, and diversify its long-term R&D pipeline.
The company’s customer-intimate business model will be further strengthened with an expanded chemical management offering. The enhanced portfolio, industry-expert associates and applications expertise will enable the combined company to bring additional value to its customers’ overall performance and operations.
The companies will continue to operate independently until the transaction is completed. Following closing of the transaction, the new company is expected to have a 12-member board of directors, consisting of nine directors from Quaker Chemical and three directors to be nominated by the Hinduja Group. Michael F. Barry will continue as chairman and CEO of the new business and the structure of the company will be determined in the period between signing and closing.
Quaker Chemical B.V.
Tel: 0031 297 544644
Email: barnagal@quakerchem.com
www.quakerchem.com