|Florida Chemical Co. produces more than 35 million pounds of citrus oil annually.|
Under the terms of the agreement, Flotek will pay $49.5 million in cash on top of more than 3 million shares of Flotek common stock for all of the outstanding shares of Florida Chemical.
"The acquisition of Florida Chemical — a global leader in citrus chemistry in the oilfield and beyond — is a transformational opportunity for Flotek," said John Chisholm, Flotek chairman, president and CEO. "Not only has Florida Chemical been a key supplier and partner of Flotek for over 15 years, they have been a leading innovator of renewable and sustainable chemistry for the oilfield, industrial and consumer staple industries. Flotek intends to leverage the vast expertise of Florida Chemical's world-class research facilities and chemists with its own research expertise to create a leading global research team in renewable and sustainable chemistries for the oilfield as well as other industrial and consumer applications. Moreover, this strategic acquisition enables Flotek to secure supply of key raw materials as well as direct control over raw material costs and inventory."
Flotek intends to make no immediate changes to the structure and operations of Florida Chemical. Josh Snively, current president and CEO of Florida Chemical, will remain President of the wholly-owned subsidiary of Flotek.
Florida Chemical operates through two operating companies: Florida Chemical Co. and FC-PRO, LLC. Combined the operating companies have annual throughput of greater than 35 million pounds of citrus oil.