Sector News

Chemtrade to buy Canexus for $675 million

December 19, 2016
Energy & Chemical Value Chain

Chemtrade Logistics Income Fund (Toronto, Ontario, Canada) and Canexus (Calgary, Alberta, Canada) have reached an agreement, under which Chemtrade will acquire Canexus for C$1.65/share in cash.

The transaction is to be completed by way of a plan of arrangement under Alberta’s Business Corporations Act. The deal values Canexus at about C$900 million (US$675 million). The companies confirmed earlier this week that they were discussing a deal at C$1.65/share.

The acquisition price is a 33% premium to Canexus’s closing price of C$1.24/share on 13 September, the last trading day before Chemtrade announced its initial C$1.45/share bid for Canexus. That bid was rejected and Chemtrade launched a hostile C$1.50/share bid for Canexus in October. Chemtrade expects the deal to close by the end of April 2017, subject to regulatory approvals and customary closing conditions.

Shareholders accounting for about 20% of Canexus’s equity, including all Canexus directors and officers, and the company’s largest shareholder Stirling Global Value Fund, have entered into binding agreements to vote their shares in favor of the agreeement, Chemtrade says. Canexus’s shareholders will consider the agreement at a meeting to be held in early February 2017. The deal will require approval from at least 66.67% of shareholders at that meeting.

Chemtrade says it has sufficient capital to fund the acquisition from available cash resources and from firm, committed financing. The company is entitled to a termination fee of C$25 million if Canexus agrees to a “superior proposal” from another company, Chemtrade says. Chemtrade also has the right to match any unsolicited, superior proposal.

Canexus produces sodium chlorate and chlor-alkali products mainly for the pulp and paper, and water tratment industries. The company has production at four plants in Canada and two in Brazil. Chemtrade is a maker of inorganic chemicals, including sulfuric acid, coagulants for water treatment, and sodium chlorate. The proposed deal “will strengthen and expand Chemtrade’s existing platform while further diversifying our North American operations and allowing us to enter attractive South American markets,” says Chemtrade CEO Mark Davis.

Canexus says its board has “unanimously determined that the arrangement is in the best interests of Canexus.” CIBC Capital Markets and The Valence Group are advising Canexus.

By Ian Young

Source: Chemical Week

comments closed

Related News

April 14, 2024

Nadja Håkansson appointed Chief Executive Officer of thyssenkrupp Uhde

Energy & Chemical Value Chain

The future CEO of thyssenkrupp Uhde, Nadja Håkansson, has held various management positions at Siemens and Siemens Energy and looks back on over 18 years of national and international experience in the areas of supply chain management, operations, sales and corporate management.

April 14, 2024

Neste and Lotte Chemical team up to scale renewable plastics from used cooking oil

Energy & Chemical Value Chain

Neste and South Korean company Lotte Chemical have partnered on a project to elevate the sustainability profile of chemicals and plastics. The partnership’s ambition is to replace fossil resources with renewable raw materials that offer a lower carbon footprint.

April 14, 2024

EU chemical industry confidence shows upward trend

Energy & Chemical Value Chain

At least the confidence in the chemical sector has been seeing an upward trend and the trade balance is recovering as destocking seems to be coming to an end. Citing projections from the European Central Bank, CEFIC states that the level of inflation is expected to fall from 5.4% in 2023 to 2.3% in 2024.

How can we help you?

We're easy to reach