Mergers & Acquisitions and Manufacturers and Calumet Specialty Products and Manufacturing & Technology

Calumet to acquire drilling-fluids maker for $235 million

March 26, 2014

Indianapolis-based Calumet Specialty Products Partners LP has agreed to buy an Oklahoma-based drilling-fluids manufacturer for about $235 million, the company said Wednesday morning.

Fast-growing Calumet said it plans to complete its acquisition of ADF Holdings Inc. by March 31. ADF is the parent company of Tulsa-based Anchor Drilling Fluids USA Inc., a leading provider of drilling-fluid solutions, completion fluids and production chemicals to the oil and gas industry.

Privately held Anchor has more than 30 manufacturing, mixing, storage and distribution facilities in 13 states.   

The company dates to the 1970s but has grown quickly since it was acquired by father-and-son team Robert and Phil West in 2005. The company had about 40 employees when they bought it. It now has more than 400 nationwide.

Calumet said the acquisition is being made on a debt-free basis and is subject to customary purchase price adjustments.

The acquisition will be funded with net proceeds from an $850 million private offering of senior notes due in 2021, the company said.

“This transaction positions Calumet as one of the leading suppliers of drilling fluids to the domestic [Exploration & Production] industry, a sector that continues to enjoy rapid growth due to advances in drilling technology and increased exploration activity in identified and emerging unconventional resource plays,” Calumet said in a prepared statement.

Calumet said Anchor had earnings before interest, taxes, depreciation and amortization, or EBITDA, of $26.3 million in 2012. That amount likely grew by 20 percent in 2013, the company said.

Calumet has been on an acquisition spree in recent years. It acquired New Jersey-based lubricant manufacturer Bel-Ray Co. Inc. in December for $53.6 million, its eighth major deal since September 2011.

Calumet shares rose 35 cents in early trading Wednesday, to $25.50 each.  

 



 

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