Innospec To Purchase Independence Oilfield Chemicals - Quick Facts

(RTTNews) - Innospec Inc. (IOSP) has reached a definitive agreement with a portfolio company of CSL Capital Management LLC to acquire all of the membership interests of Independence Oilfield Chemicals LLC or IOC. Subject to a Hart Scott Rodino review, the transaction is likely to close no later than October 31, 2014.

Houston-based IOC services the oil and gas industry, focusing on completion, stimulation and production chemicals. The business, employing nearly 140 people, has been growing very rapidly and has current annualized sales of around $150 million. IOC also has assets based in the Eagleford, Bakken, Barnett, Niobrara and Marcellus basins.

The consideration for the proposed transaction consists of an initial payment of nearly $100 million, representing 51 percent of the estimated total and is approximately 7.5x IOC's EBITDA based on recent trading performance. As IOC has been in a phase of very rapid growth, the remaining payments are performance related and payable over the next couple of years at the same multiple.

Innospec plans to fund the transaction via. existing cash and debt facilities, and the transaction is expected to be accretive immediately upon completion.