Flotek buying Florida Chemical for about $102.5MMay 10, 2013
HOUSTON (AP) — Oilfield services provider Flotek Industries Inc. is buying citrus oils processor Florida Chemical Co. in a cash-and-stock deal valued at about $102.5 million.
Florida Chemical has served as a supplier and partner to Flotek for more than 15 years.
"This strategic acquisition enables Flotek to secure supply of key raw materials as well as direct control over raw material costs and inventory," Flotek Chairman, President and CEO John Chisholm said in a statement.
Flotek will pay $49.5 million in cash and about 3.3 million of its shares in the transaction.
Flotek shares closed at $1.05 per share on Thursday.
Privately held Florida Chemical makes bio-based products for a variety of industries, including applications in the oil and gas business. The Winter Haven, Fla., company uses solvent, chemical synthesis and flavor/fragrance applications from citrus oils at facilities in Florida and Texas.
Houston-based Flotek said that it has reached an amended and restated credit agreement with PNC Bank. The bank is boosting Flotek's total credit agreement to $150 million, which includes a $50 million term loan and a $75 million revolving credit facility. Flotek said Friday that it plans to fund the cash part of the acquisition with proceeds from the term loan and credit facility.
Flotek said it doesn't plan to make any immediate changes to the structure and operations of Florida Chemical.
The company's president and CEO, Josh Snively, will continue as president when Florida Chemical becomes a Flotek subsidiary.