Trecora Resources, a provider of specialty hydrocarbons, has agreed to be acquired by an affiliate of Balmoral Funds for an enterprise value of $247m.
Under the terms of the merger deal, Balmoral will acquire all outstanding shares of Trecora’s common stock at a purchase price of $9.81 per share in cash.
The transaction price represents a 29.9% premium to Trecora’s closing stock price on 10 May 2022.
Formerly known as Arabian American Development Company, Trecora is engaged in the manufacture of specialty petrochemical products and synthetic waxes as well as providing custom processing services.
Trecora owns and operates a petrochemicals facility specialising in high purity hydrocarbons and other petrochemical manufacturing in Texas. The company also owns a specialty wax facility.
Trecora president and chief executive officer Pat Quarles said: “Under the oversight of our Board of Directors and with the support of our talented team, we have worked diligently to enhance our execution, maximize operating efficiencies and reposition the Company for growth.
“We are excited to enter this new chapter with Balmoral, which shares our enthusiasm for the future of our business and our opportunities for growth.
“With Balmoral’s support, we remain deeply committed to supporting our customers with the quality and service level they have come to depend on us for.”
The transaction, which has been approved by the Trecora board of directors, is expected to close in the third quarter this year, subject to certain customary closing conditions.
After completion of the tender offer, Balmoral will acquire all the remaining shares left from the tender offer, through a second-step merger at the same price.
Upon closing of the merger, Trecora will operate as a privately held company and the shares of Trecora Common Stock will no longer be listed on any market.
Guggenheim Securities served as exclusive financial advisor and Morgan, Lewis & Bockius and Vinson & Elkins as legal advisors to Trecora, while Piper Sandler served as financial advisor and Blank Rome as legal advisor to Balmoral, on the transaction.
Balmoral managing director David Shainberg said: “We are delighted to announce this transaction with Trecora and are eager to execute on its growth plan.
“Having followed Trecora for years, we’re encouraged by its strong customer relationships and product demand. This is Balmoral’s fourth acquisition in the chemicals sector and we are excited to contribute to Trecora’s continued success as a private company.”
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