(By Balaseshan) Innospec Inc. (NASDAQ: IOSP), an international specialty chemicals company, said its subsidiary has purchased Strata Control Services Inc., a private company that supplies mud and fluid loss solutions to oil and gas drilling operations.
The deal is expected to be accretive to Innospec within the first year. Strata Control will become part of Innospec's Oilfield Specialties business.
Based in Crowley, Louisiana, Strata Control's products and services prevent the unnecessary loss of valuable materials into the formation matrix, thereby lowering the cost of operations. Strata Control's sales for 2012 were about $20 million.
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Innospec's Chief Executive Patrick Williams said he looks forward to working with Strata Control's Chief Executive Steve Cart and his team to expand the sales of their excellent product lines, using the company's global organization.
"I am delighted that we have taken this important step in acquiring to build out our presence in this growing market. It is important to recognize that this is only our first acquisition in growing this business, and we will continue to pursue other attractive opportunities in this market," said Williams.
The transaction, which was completed on December 24, 2012, includes a performance element in the purchase price and represents between 6 times 2012 EBITDA and 5 times 2013 EBITDA.
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Innospec develops, manufactures, blends and markets fuel additives, personal care and fragrance products and other specialty chemicals. The company's products are sold to oil refineries, personal care and fragrance companies, and other chemical and industrial companies globally.
IOSP is trading up 1.76% at $37.01 on Monday. The stock has been trading between $25.18 and $37.19 for the past 52 weeks.