Hyderabad-based Gulf Oil Corporation Limited (GOCL), through its subsidiary in the UK, is acquiring a 100% stake in Houghton International Inc for $1,045 million. The deal, is however, is subject to customary closing conditions.
In a filing to the BSE on Wednesday, GOCL said that an agreement was signed for the acquisition by its fully-owned subsidiary in the UK on November 6, 2012 with the sellers, a UK-based private equity fund.
Houghton, whose chemicals and lubricants are used in the metal-working and automotive industries, was bought by New York-based private equity firm AEA Investors in 2007.
“GOCL will operate Houghton as a separate company and the rest of Gulf's operations will be able to leverage Houghton's extensive base of industrial customers to offer them a complete end-to-end range of lubricants. In addition, there are synergies that can be achieved in manufacturing, strategic sourcing and distribution,” the company said.
Gulf Oil Corporation’s officials were unavailable for comment.
GOCL’s acquisition of Houghton is the second biggest buyout planned by an Indian company so far this year, the biggest being Indian Hotels Company's offer of $1.86 billion to buy Bermuda-based Orient-Express Hotels Limited (OEHL) in October 2012.
Houghton acquired DA Stuart Holding GmbH in 2008 which was followed by its acquisition of Shell’s metal working fluids (MWF) business in 2011, to further strengthen its position in the $7-billion global market.
“The acquisition (of Houghton) fits extremely well with Gulf's lubricant portfolio. Houghton has a very strong industrial portfolio, which perfectly complements Gulf’s very strong presence in the automotive lubricant sector,” GOCL said.
Houghton, a brand in the MWF segment, especially in the North American and European markets, has a global footprint with sales in more than 75 countries, which are supported by 12 manufacturing facilities in 10 countries. The company, on a 12-month basis ending September 2012, has recorded sales of $858 million and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) of $132 million.
Gulf Oil’s scrip ended the trade at Rs 86.35 on the BSE, down 1.43%, over the previous close of Rs 87.60 a share.