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Clariant Grows Oil-Chemicals Portfolio

Friday, September 16, 2016

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In an effort to expand the footprint of its North American oil-chemicals business, a Swiss chemical maker plans to acquire two Texas-based firms that specialize in oilfield production chemicals.

Known for its work with pigments and dyes, specialty chemicals company Clariant announced Wednesday (Sept. 14) that it would buy both Midland-based Kel-Tech Inc. and X-Chem LLC, located in Irving.

The all-cash deals for both acquisitions are slated to close Oct. 1.

Clariant lab
Photos: Clariant

Swiss specialty chemicals company Clariant plans to extend its oil-chemicals portfolio and market reach with the acquisition of Texas based Kel-Tech Inc. and X-Chem LLC, it announced this week.

All parties involved have agreed not to disclose any additional financial terms, the Muttenz-based company said.

Expanded Market Presence

Formed in 1995 as a spinoff of Sandoz, Clariant is focused on four business areas: care chemicals, catalysis, natural resources, and plastics and coatings. In addition to the manufacture of additives and pigments for paints and coatings, the company produces chemicals that assist in the production and processing of oil and gas, ores and metals.

On top of helping to help stimulate production at oil and gas wells, Clariant’s products are said to reduce corrosion in pipelines.

According to a Reuters report, Chief Executive Officer Hariolf Kottman set out to take advantage of the pressures low oil and gas prices were exerting on affiliated businesses. Takeovers would enable his company to expand its reach in the oil-chemicals market in the United States and Canada, it said.

Clariant CEO Kottmann

"It is part of our global strategy to seize business opportunities in key markets with excellent future prospects through innovations and bolt-on acquisitions,” CEO Hariolf Kottman Kottman said.

"It is part of our global strategy to seize business opportunities in key markets with excellent future prospects through innovations and bolt-on acquisitions,” Kottman stated.

“Both of these acquisitions allow us to strengthen our position in one of the world's largest specialty chemicals markets, to benefit from the strong, innovation-driven growth perspective of the oil services industry in North America and are accretive to our earnings from year one on," he added.

Upon completion of the deals, Clariant expects the acquisitions will bring and additional $200 million to the company’s $5.93 billion in annual sales. The transactions will also increase personnel, technology and expertise within its existing activities in North America, the company said in its statement.

Moreover, Clariant said it will leverage the companies' brands and innovations to better meet market needs and expand market presence.

Company Overviews

Founded in 1983, Kel-Tech is described as a manufacturer and supplier of specialty chemical products for production, field stimulation, and drilling applications throughout the onshore U.S. The company has an on-site custom blending facility and offers laboratory analysis, in addition to its products and services.

Clariant oil field

In addition to expecting its customer base and gaining access to strategic oil-producing basins, these acquisitions will enable Clariant to offer customers a stronger and more extensive product offering with customized products, the company says.

Clariant is purchasing the company through an agreement from current owners Arsenal Capital Partners, a private equity firm focused on companies in chemical, general industrial, and healthcare sectors. The transaction has received regulatory clearance, according to Clariant.

X-Chem, founded in 1982, services both onshore and offshore customers in the U.S., providing solutions for the maintenance, production, completion and stimulation of oil wells, gas wells and pipelines. It touts 31 active locations throughout the country, catering to major producing areas, its website says.

The X-Chem purchase from current owner NCH Corporation, a global provider of industrial, commercial, and institutional maintenance products and services, has also secured regulatory clearance.

In addition to expanding its customer base and gaining access to strategic oil-producing basins, these acquisitions will enable Clariant to offer customers a stronger and more extensive product offering with customized products, says John Dunne, Global Head of Clariant's Business Unit Oil & Mining Services.

“Kel-Tech and X-Chem are well-run businesses with complementary operational efficiencies, which we can immediately incorporate into our existing business and combine with our state-of-the-art technology and R&D," Dunne adds.

Both companies are said to be active in the Permian Basin—the biggest and fastest-growing U.S. shale oil field extending from Texas to New Mexico, Reuters notes.

   

Tagged categories: Acquisitions; Asia Pacific; Clariant; EMEA (Europe, Middle East and Africa); Expansion; Latin America; Market; North America; Oil and Gas; Program/Project Management

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