logo
Plus   Neg
Share
Email

Flotek Industries To Sell Florida Chemical To ADM For $175 Mln

Flotek Industries Inc. (FTK) said that it agreed to sell Florida Chemical Company, LLC, its Consumer and Industrial Chemistry Technologies segment, to Archer Daniels Midland Co. (ADM) for total consideration of $175 million in cash, subject to post-closing working capital and other adjustments.

Flotek will retain all of its patents.

In connection with the sale of FCC, Flotek and ADM have entered into long-term reciprocal supply agreements. The first will secure Flotek's long-term supply of d-limonene. Additionally, Flotek will manufacture differentiated chemistries for Florida Chemical's industrial customers. Finally, the companies will explore opportunities to jointly develop next-generation chemistry technologies for the oil and gas and agricultural industries.

The closing of the transaction is expected during the first quarter of 2019 and is subject to customary closing conditions, including obtaining necessary approval related to the Hart-Scott-Rodino Act.

When the transaction is complete, Florida Chemical Company's about 75 employees will transfer to ADM, Archer Daniels Midland said.

Flotek anticipates that the transaction will have a negligible cash tax effect, as the gain on this sale should be substantially offset by the Company's outstanding net operating losses.

Flotek noted that it intends to use the net proceeds to pay off its credit facility balance of approximately $50 million. In addition, the Company is currently considering investing $20 million to $30 million in previously identified organic growth capital projects and will carefully review other future potential uses of the remaining funds.

Flotek intends to establish a Strategic Capital Committee to evaluate and make recommendations to the Board regarding the manner in which the Company will deploy the remaining net proceeds from the sale of FCC. This includes the potential for additional investments in its business, returning capital to shareholders and other potential alternatives. The Committee plans to engage a leading advisory firm.

For comments and feedback contact: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
Starbucks Inc. has announced changes to its Starbucks Rewards loyalty program, noting that the revamp will provide its members with more flexibility and choice when they redeem stars at the company's stores. Starting on April 16, all members of the Starbucks Rewards loyalty program will be able to earn and redeem Stars for Rewards immediately after they join the program. Payment processing giant Visa Inc. is seeking a Technical Product Manager with expertise in cryptocurrency and blockchain for its cryptocurrency team. The company has listed a job opening on San Francisco-based recruiting software firm SmartRecruiters to find the manager for Visa Fintech. IBM announced the launch of IBM Blockchain World Wire, a real-time global payments network, aiming to support payments and foreign exchange in more than 50 countries. The network provides real time clearing and settlement using both stable coin backed by U.S. dollars and cryptocurrency.
Follow RTT