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Italmatch to acquire Detrex

Italmatch Chemicals Group (Italmatch) is to acquire Detrex for USD27 a share in cash following the agreement of a merger deal between the two companies.

Under the terms of the Merger Agreement dated 10 November, 2017, each share of Detrex common stock outstanding immediately prior to the merger will be converted into and exchanged for the right to receive USD27.00 in cash. The merger consideration represents an 8 per cent premium over the closing bid price of Detrex’s common stock as quoted on the website of OTC Markets Group on 9 November, 2017, and a 9 per cent premium over the average price for the 30-day period ended 9  November, 2017, and a 16 per cent premium over the average price for the 90-day period ended 9 November, 2017. The Boards of Directors of both companies unanimously approved this transaction.
Thomas E Mark, President and Chief Executive Officer of Detrex, says: “After thorough analysis, the Board has unanimously endorsed this proposed sale, which we believe maximises value for our stockholders. On behalf of the Board, I would like to recognise 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, says: “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 organisational 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 31 December, 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 per cent of the shares have agreed to vote in favour of this proposal unless a Superior Proposal (as defined in the Merger Agreement) is received.
KeyBanc Capital Markets Inc. is acting as financial advisor to the Detrex Board, and has provided a fairness opinion to the Board in connection with the transaction. Clark Hill PLC is acting as legal advisor to Detrex in connection with the proposed merger. Lincoln International is acting as financial advisor to Italmatch in connection with the transaction. Dykema Gossett PLLC and Giovannelli e Associati are acting as legal advisors to Italmatch in connection with the transaction.

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