Chemtrade Logistics Income Fund, Toronto, has confirmed that on Nov. 8 it completed the sale of its phosphorus pentasulfide (P2S5) business to Trecora LLC, The Woodlands, Texas. The gross proceeds were US$43 million, which consisted of cash of approximately $39.4 million and the assumption of indebtedness of approximately $3.6 million.
Chemtrade estimated a pre-tax gain on the sale of about $14 million, which will be recorded during fourth-quarter 2023. The company said the net proceeds will be used to reduce borrowings from credit facilities.
The phosphorus asset was based in Lawrence, Kan., and was Chemtrade’s lubricant additive business. The business, one of North America’s leading phosphorus pentasulfide producers, will be part of Trecora’s Specialty Chemicals business headquartered in The Woodlands. Trecora is a producer of high purity hydrocarbons.
“We are extremely enthusiastic and committed to working with the talented team in Lawrence, Kan., to grow and innovate this already great business,” said Trecora President and CEO Brad Crocker. “This business complements our specialty chemical portfolio with its offering of unique and cost-effective solutions for constantly evolving lubricant requirements.”
Trecora is an affiliate of Balmoral, a Los Angeles-based private equity fund founded in 2005. It has approximately $1.5 billion of assets under management. Balmoral typically invests in companies that have revenues between $30-$500 million and require equity investments of $10-$75 million, with the capability of doing more in particularly compelling opportunities.