KIK Custom Products Inc., a contract and private-label manufacturer of consumer, institutional, and industrial products based in Toronto, has entered an agreement to purchase Chemtura Corp.’s BioLab consumer products business for $315 million. The deal is set to close Dec. 31.
Proceeds from the sale, along with other potential entities, will be used to return capital to Chemtura’s shareholders, strengthen and grow the company’s remaining businesses as well as to pay down debt.
“This represents the next step in our plan to simplify and transform our portfolio, positioning us to better benefit from secular industry growth trends in our chosen areas of market focus and create a sustainable competitive advantage,” said Chemtura’s chairman, president, and CEO, Craig A. Rogerson.
Following the sale, Chemtura’s main businesses will focus on two market segments: industrial performance products (IPP) (e.g. petroleum additives and urethanes products) and industrial engineered products (IEP) (e.g. flame retardants and brominated products, and organometallics).
KIK entered the pool care business in 2011 with the acquisition of Chem-Lab Products Inc., and currently manufactures and sells Kem-Tek brand pool products in the U.S. The company network includes 14 integrated manufacturing facilities located throughout North America, which produce the company’s various product lines, including bleach, household cleaners and sanitizers, pool and spa water treatment products and additives, personal care and over-the-counter medicated and pharmaceutical products.
“This acquisition will be an important step in the next-stage growth of our company,” said Jeff Nodland, KIK’s CEO. “We expect it to contribute to generating strong free cash flow while diversifying our product portfolio and expanding our customers and channels.”
This acquisition comes after the company’s announcement in August of an initiative with The Clorox Company that will see a new line of Clorox™ Pool&Spa products launched in 2014 at select retailers in Canada and the U.S. The launch is limited to pool and spa chemicals and accessories under the Clorox™ Pool&Spa brand and will be represented in the marketplace by Easy 1 2 3 Pool Care LLC, the U.S.-based subsidiary of KIK Custom Products Inc., dedicated to pool care products.
“We are excited to partner with Clorox to take their iconic brand to market in pool care,” said Stratis Katsiris, president of KIK’s Classic Division.
Dawn Willoughby, senior vice-president and general manager of The Clorox Company’s cleaning division, added: “This initiative builds on KIK’s capabilities in pool products and enables us to introduce the Clorox brand into a new lifestyle category for consumers.”