Superior Plus, a maker of sodium chlorate, chlor-alkali, chlorine dioxide generators, and related products, says it has completed the previously announced sale for $577 million of its specialty chemicals business to private equity firm Birch Hill Equity Partners.
The company received $600 million in cash proceeds from Birch Hill, subject to certain adjustments, and $125 million in the form of a 6% unsecured note issued by the affiliate of Birch Hill acquiring the chemicals business, Superior says. The consideration received is subject to certain post-closing adjustments as previously disclosed, it adds.
The sale of the chemicals business “was an important component of our strategic plan and provides us with additional capital to further accelerate our accretive growth strategy in the US and Canadian propane markets,” says Superior’s president and CEO Luc Desjardins. The company has a “robust pipeline” of acquisition opportunities, and anticipates more than doubling its US propane distribution EBITDA from operations over the next five years, he says. The transaction completes Superior’s transformation into a pure-play energy distribution company, he adds.
Superior and Birch Hill announced in February this year they had agreed terms for the acquisition of the business, which focuses on inorganic chemicals. The acquired business generated C$151.9 million in EBITDA during 2019. It is the second-largest producer of sodium chlorate in the world and the second-largest producer of potassium products in North America. The inorganics unit had previously been offered for sale mid-2019 before the process was put on the backburner in 2020 after failing to attract sufficiently high bids.
Orrick, Herrington & Sutcliffe LLP acted as legal counsel to Superior on the Birch Hill transaction, with Barclays acting as financial advisor. Proceeds from the sale will go toward reducing Superior’s debt and financing acquisitions in the retail propane business, it says.
Source: Chem Week
