Flotek Industries Inc. has announced that it has entered into a definitive agreement to sell Florida Chemical Co. LLC (FCC), its Consumer and Industrial Chemistry Technologies segment, to Archer Daniels Midland Co. (ADM) for total consideration of US$175 million in cash, subject to post-closing working capital and other adjustments.
In connection with the sale of FCC, Flotek and ADM have entered into long-term reciprocal supply agreements. The first will secure Flotek's long-term supply of d-limonene.
Additionally, Flotek will manufacture differentiated chemistries for FCC’s industrial customers.
Finally, the companies will explore opportunities to jointly develop chemistry technologies for the oil and gas and agricultural industries.
The closing of the transaction is expected during 1Q19 and is subject to customary closing conditions, including obtaining necessary approval related to the Hart-Scott-Rodino Act. Flotek anticipates that the transaction will have a negligible cash tax effect, as the gain on this sale should be substantially offset by the Company's outstanding net operating losses.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/14012019/flotek-industries-to-sell-florida-chemical-to-adm/