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Calumet buys petroleum products firm for $240M

October 22, 2007

Calumet Specialty Products Partners LP, the Indianapolis company that produces specialized petroleum-based products, has bought Texas-based Penreco for $240 million.

Penreco is a general partnership owned by ConocoPhillips Co. and M.E. Zukerman Specialty Oil Corp. that manufactures and markets white mineral oils, and other petroleum products and specialty solvents. It is headquartered in The Woodlands, a Houston suburb.

Included in the acquisition are plants in Karns City, Penn., and Dickinson, Texas, as well as long-term supply agreements with ConocoPhillips. Penreco generated $432 million in revenue last year.

The deal is expected to close before the end of the year.

Separately, Calumet said that it anticipates that profit for its fiscal third quarter, which ended Sept. 30, will fall by about half from the $43.5 million before interest, taxes, depreciation and amortization it earned in the prior quarter. It blamed the decline on a sharp rise in crude oil prices.

Earnings will be between $20 million to $22 million before interest, taxes, depreciation and amortization, it predicted.

However, Calumet said such price increases normally are passed through to customers after a period of time.

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