Ardian-backed Italmatch to buy Detrex for $27 per share

Italmatch, which is backed by Ardian, has agreed to acquire Michigan-based Detrex Corp, a maker of high performance specialty chemicals, for $27 per share in cash. KeyBanc Capital Markets Inc is serving as financial adviser to the Detrex board while Lincoln International is doing likewise to Italmatch.

PRESS RELEASE

CLEVELAND–(BUSINESS WIRE)–Detrex Corporation (“Detrex”) (OTCQX:DTRX.PK) and Italmatch Chemicals Group (“Italmatch”) jointly announced today that they have entered into a definitive agreement and plan of merger (“Merger Agreement”) pursuant to which a newly formed subsidiary of Italmatch will acquire Detrex for $27.00 a share in cash.

Under the terms of the Merger Agreement dated November 10, 2017, each share of Detrex common stock outstanding immediately prior to the merger will be converted into and exchanged for the right to receive $27.00 in cash. The merger consideration represents a 8% premium over the closing bid price of Detrex’s common stock as quoted on the website of OTC Markets Group on November 9, 2017, and a 9% premium over the average price for the 30-day period ended November 9, 2017, and a 16% premium over the average price for the 90-day period ended November 9, 2017. The Boards of Directors of both companies unanimously approved this transaction.

Thomas E. Mark, President and Chief Executive Officer of Detrex, said: “After thorough analysis, the Board has unanimously endorsed this proposed sale, which we believe maximizes value for our stockholders. On behalf of the Board, I would like to recognize our outstanding team of dedicated employees who have made Detrex and its operating subsidiary, The Elco Corporation (Elco), the success it is today. Elco and Italmatch share the same high operating standards and have a similar overall company culture. The Board believes this is a great opportunity for Elco to be a part of an organization with deeper resources and operational scale in the specialty chemicals business. We look forward to working with Italmatch to promptly complete the transaction.”

Sergio Iorio, Managing Director of Italmatch Chemicals Group, said: “Italmatch Chemicals is a leading global specialty additives company with 340 million Euros in sales and a strong focus and commitment, through R&D and innovation, on the industrial lube oil markets. We have known Elco, its products and Management Team for many years. Elco will bring highly complementary products, synergies and geographical aspects, as Italmatch is focused on EMEA markets and Elco on NA/LATAM markets, with sales and organizational synergies in other Regions. In addition, from a product portfolio point of view, Italmatch is a leader in special synthetic base stock and anti-wear additives, and Elco has a distinctive and very complementary position in EP additives and Ad-pack for grease and MWF. We believe both companies share the same spirit and interest for innovation and we are confident of a bright future together.”

The proposed merger is expected to close by December 31, 2017, subject to the approval by the holders of at least two-thirds of the issued and outstanding shares of common stock of Detrex and the satisfaction or waiver of customary closing conditions. There is no financing condition to complete the proposed acquisition. Directors and major shareholders representing approximately 52% of the shares have agreed to vote in favor of this proposal unless a Superior Proposal (as defined in the Merger Agreement) is received.

The section of the Merger Agreement addressing competing proposals received by Detrex prior to approval of the Merger Agreement will be accessible on Detrex’s website under “News — Financial Reports” at www.detrex.com, or from the OTC Markets’ website at www.otcmarkets.com under the ticker “DTRX.PK.”
KeyBanc Capital Markets Inc. is acting as financial advisor to the Detrex Board, and has provided a fairness opinion to the Board in connection with the transaction. Clark Hill PLC is acting as legal advisor to Detrex in connection with the proposed merger. Lincoln International is acting as financial advisor to Italmatch in connection with the transaction. Dykema Gossett PLLC and Giovannelli e Associati are acting as legal advisors to Italmatch in connection with the transaction.

About Detrex Corporation
Detrex is a Michigan corporation that manufactures high performance specialty chemicals serving three distinct business areas; namely additives for industrial petroleum products, high purity hydrochloric acid for the semiconductor industry, and specialty chemicals.

About Italmatch Chemicals Group
Founded in 1997, Italmatch Chemicals is a leading innovative chemical group, specialized in performance additives for lubricants, water treatment, oil & gas and plastics, and boasts a wide product range able to fulfill the requirements of the most demanding applications, including personal care. The group generates 340 million Euros in revenues and operates through six manufacturing plants in Europe (Italy, Spain, Germany and UK), four in Asia Pacific (China and Japan), two in North America (USA) and sales/distribution subsidiaries in Belgium, China, Japan, India, Poland, Singapore and the USA. Italmatch has over 500 employees.

Italmatch is controlled by funds managed by Ardian France S.A., the largest European independent private investment company and a world leader in private equity, which acquired the majority of Italmatch together with management in July 2014 and is committed to supporting the company’s growth.