Superior Plus puts specialty chemicals business on the block

June 10, 2019

Superior Plus Corp. (Toronto, Ontario) today announced that it is considering the sale of its specialty chemicals business which operates under the trade name ERCO Worldwide. The company has retained Barclays Capital Canada to assist with a potential sale. Superior says it regularly conducts reviews of its portfolio to assess the strategic fit within the overall direction of the company. The company is looking to become a pure play energy business.

Superior says that in the event the specialty chemicals business is sold, it will evaluate the best use of the proceeds, which it expects will be used primarily to reduce debt and to invest in US propane distribution acquisitions. “We expect specialty chemicals will be highly marketable, attracting strong buyer interest and an attractive valuation,” says Luc Desjardins, president and CEO of Superior. He adds that the specialty chemicals business is a solid sustainable business with strong cash flows and Superior is “very comfortable continuing to own the business if the process does not result in an acceptable valuation.” Superior has not set a timetable for completion of the review process.

ERCO Worldwide focuses on the production and supply of inorganic chemicals. Its major business areas include sodium chlorate, chlor-alkali products, sodium chlorite, and chlorine dioxide technology. The business serves a number of key customer segments including pulp & paper, food, energy, agriculture, water treatment, airport de-icing, fertilizers and specialty chemicals. It is the second largest producer of sodium chlorate in the world and the second largest producer of potassium products in North America.

ERCO in 2018 reported an EBITDA of $137.6 million and EBITDA margin of 20.3%. Last year, the US accounted for 62% of ERCO’s end markets, Canada 23% and international 15%.

Superior expanded its specialty chemicals business in 2015 when it acquired Canexus (Calgary, Alberta), a producer of sodium chlorate and chlor-alkalis, which it merged with its ERCO division.

By Natasha Alperowicz

Source: Chemical Week

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