(Note: All dollar amounts Canadian dollars unless otherwise noted)
TORONTO, Jan. 23, 2014 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) ("Chemtrade" or the "Fund") announced today that it has completed its previously-announced acquisition of Parsippany, New Jersey-based General Chemical Holding Company ("General Chemical"). The final total cash purchase price is expected to be approximately US$900 million (the "Purchase Price"), after a working capital adjustment and payment of post-closing taxes (the "Transaction").
"This is a historic event for Chemtrade. The acquisition of General Chemical adds significant size, scale and scope to Chemtrade's existing product and service platform," said Chemtrade President and Chief Executive Officer, Mark Davis. "General Chemical has strong portfolio alignment with our current business, enhancing our existing sulphuric acid geographic footprint and greatly expanding our water treatment business so it now extends across most of North America. The acquisition of General Chemical also moves Chemtrade into new but related product categories and end markets, and positions Chemtrade to capitalize on new growth opportunities."
The all-cash Transaction was financed by a combination of: (i) US$1.0 billion syndicated senior secured credit facilities consisting of a US$600 million term loan and a US$400 million revolver with a US$150 million optional accordion; and (ii) the net proceeds of an offering of 18.17 million subscription receipts (the "Subscription Receipts"), inclusive of 2.37 million Subscription Receipts issued pursuant to the exercise in full of the underwriters' over-allotment option, that was also completed today and raised gross proceeds of $345.2 million (the "Offering").
With the closing of the Transaction, pursuant to the Offering, the Subscription Receipts have been exchanged on a one-for-one basis for units of Chemtrade without payment of additional consideration or further action, with the result that an aggregate of 18.17 million units have now been issued. These units will commence trading on the TSX on January 23, 2014, and the Subscription Receipts will not trade. The Offering was undertaken on a bought deal basis by a syndicate of underwriters led by BMO Capital Markets and Scotiabank (the "Joint Bookrunners").
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, coagulants for water treatment, liquid sulphur dioxide, sodium nitrite and sodium hydrosulphite. Chemtrade is a leading processor of spent acid as well as a leading regional supplier of sulphur, sodium chlorate, phosphorus pentasulphide, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing hydrogen sulphide and other by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual Information Form, the "Risks and Uncertainties" section of the Fund's most recent Management's Discussion & Analysis, and the "Risk Factors" section of the Fund's short form prospectus for the Offering.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: there being no significant disruptions affecting the operations of the Fund and its subsidiaries, whether due to labour disruptions, supply disruptions, power disruptions, transportation disruptions, damage to equipment or otherwise; the ability of the Fund to obtain products, raw materials, equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Fund's expectations; the timely receipt of required regulatory approvals; the cost of regulatory and environmental compliance being consistent with current levels or in line with the Fund's expectations; the ability of the Fund to successfully access tax losses and tax attributes; the ability of the Fund to obtain financing on acceptable terms; currency, exchange and interest rates being consistent with current levels or in line with the Fund's expectations; and global economic performance.
The Fund disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
SOURCE: Chemtrade Logistics Income Fund
For further information:
President and CEO
Tel: (416) 496-4176
Vice-President, Finance & CFO
Tel: (416) 496-4177