Chemtrade Logistics Income Fund Completes Acquisition of Polytec, Inc. for $150 Million
Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade” or the “Fund”) announced today the successful completion of its previously disclosed acquisition of Polytec, Inc. (“Polytec”), a southeastern United States-based provider of turnkey water treatment solutions. The transaction, valued at US$150 million, was financed through a draw on Chemtrade’s existing credit facility. This strategic acquisition marks a significant milestone for Chemtrade, expanding its water treatment capabilities and supporting its long-term Vision 2030 growth objectives.
Polytec, headquartered in the southeastern United States, has established a strong reputation for delivering comprehensive water treatment solutions, catering to municipal, industrial, and food-processing clients. By acquiring Polytec, Chemtrade not only broadens its product and service offerings but also gains access to a unique platform that can be leveraged across its extensive North American footprint. The integration of Polytec into Chemtrade’s operations is expected to create numerous cross-selling opportunities and drive growth in both existing and new markets.
A key aspect of the acquisition is the commitment of Polytec’s founder, Jack Harmon, to remain actively involved with the business for a transitional period. This ensures continuity for employees and customers, facilitating a smooth integration of Polytec’s operations into Chemtrade’s larger organizational framework. Harmon’s ongoing participation underscores the company’s dedication to maintaining the high standards of service and quality that have become synonymous with the Polytec brand.
From a strategic perspective, the acquisition represents an important step in Chemtrade’s broader expansion plans. The addition of Polytec enhances Chemtrade’s water treatment chemicals platform, not only through the integration of complementary service capabilities but also by broadening the range of products and diversifying end markets. By incorporating Polytec’s expertise and client base, Chemtrade is positioning itself to capture additional revenue streams in municipal and food-processing sectors, areas that align with the company’s growth priorities.
Scott Rook, President and CEO of Chemtrade, commented on the acquisition, saying, “We are pleased to welcome Polytec’s employees and customers to Chemtrade. This acquisition represents a significant growth opportunity by adding a unique treatment solutions platform to our water chemicals business. Polytec’s founder, Jack Harmon, has built a company with a well-known reputation for high-quality service and products that will be an excellent complement to Chemtrade’s industry-leading manufacturing capabilities. Moreover, Polytec diversifies Chemtrade’s customer base while contributing to our Vision 2030 framework.”
Chemtrade’s Vision 2030 initiative focuses on sustainable, long-term growth by enhancing its operational capabilities, expanding its service offerings, and deepening customer relationships. The Polytec acquisition directly supports this strategic vision by combining Chemtrade’s established water chemicals business with a turnkey service platform, enabling a more integrated approach to client needs. The acquisition is expected to strengthen Chemtrade’s position as a leading provider of water treatment solutions across North America, reinforcing its commitment to delivering innovative, high-value solutions to its customers.
Rohit Bhardwaj, CFO of Chemtrade, also emphasized the financial significance of the acquisition, stating, “The acquisition of Polytec is possible, in significant part, because of the steps we have taken to strengthen and mature our balance sheet. Chemtrade’s robust cash flows, further enhanced by those of Polytec, ensure significant capacity to continue investments in high-return organic growth projects and to return capital to unitholders. Following the closing of the acquisition, Chemtrade’s leverage remains within our target range and we have ample liquidity.”
The financial structure of the acquisition reflects Chemtrade’s disciplined approach to capital allocation. By leveraging its credit facility, the Fund was able to complete the transaction efficiently while maintaining financial flexibility. The integration of Polytec’s cash flows into Chemtrade’s broader financial framework is expected to enhance the Fund’s overall liquidity position and provide additional resources for strategic investments, further driving long-term shareholder value.
In addition to financial benefits, the Polytec acquisition also brings operational synergies. Chemtrade anticipates leveraging Polytec’s turnkey service capabilities to complement its own manufacturing operations, creating opportunities for cross-selling, operational efficiencies, and improved customer service. By combining the strengths of both organizations, Chemtrade is poised to deliver a more comprehensive and integrated offering to clients, further differentiating itself in the competitive water treatment market.
Polytec’s portfolio of solutions includes chemical supply, system design, installation, maintenance, and optimization services, allowing clients to benefit from end-to-end water treatment management. By integrating these capabilities into its existing platform, Chemtrade enhances its ability to meet the diverse needs of municipal and industrial clients, particularly in sectors where turnkey solutions are increasingly in demand.
Chemtrade’s commitment to operational excellence and customer satisfaction will continue to guide the integration process. The company has outlined plans to ensure that Polytec’s employees, operations, and customer relationships are seamlessly incorporated into Chemtrade’s broader operations. This approach aims to preserve the core strengths and culture of Polytec while aligning with Chemtrade’s standards and strategic objectives.
Looking ahead, the Polytec acquisition is expected to accelerate Chemtrade’s growth trajectory, both organically and through potential future acquisitions. By expanding its service offerings, diversifying its client base, and enhancing operational capabilities, Chemtrade is better positioned to pursue high-return opportunities across North America. This acquisition not only strengthens Chemtrade’s current operations but also lays a foundation for continued innovation and growth in the water treatment sector.
In summary, Chemtrade’s acquisition of Polytec represents a transformative step for the Fund. The transaction brings together two complementary businesses, expands Chemtrade’s capabilities, diversifies its customer base, and strengthens its financial and operational position. With the successful closing of the acquisition, Chemtrade is well-positioned to capitalize on new growth opportunities while continuing to execute on its Vision 2030 strategic framework. The integration of Polytec into Chemtrade’s operations marks the beginning of a new chapter, one that combines innovative solutions, robust financial health, and a commitment to delivering long-term value to shareholders, employees, and customers alike.
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