KMG has finalized the acquisition of Flowchem, a leading manufacturer of pipeline performance products, from Arsenal Capital Partners for a purchase price of $495 million in cash, including working capital of approximately $15.5 million.
“We’re pleased to announce the completion of this strategic acquisition and we welcome Flowchem’s dedicated and talented team to KMG,” said Chris Fraser, KMG’s Chairman and CEO. “Flowchem is a unique asset that enables KMG to further expand and strengthen our growth platform serving the global pipeline and energy services market. Flowchem’s technology and capabilities complement our valve lubricants, sealants and services business, enhancing the breadth of high-performance products and services KMG provides to optimize pipeline efficiency, lower operating costs and enhance safety.”
Based in Waller, Texas, Flowchem is a leading global provider of drag-reducing agents (DRAs), related support services and equipment to midstream crude oil and refined fuel pipeline operators. DRAs are specialty chemicals utilized in midstream pipelines to reduce friction near the pipeline walls and within the turbulent fluid flowing through the pipeline network. By lessening fluid turbulence in pipelines, DRAs are highly effective in optimizing pipeline flow and lowering pipeline operating costs by increasing throughput capacity and reducing operating pressure.
“We’re excited to join KMG,” said Manuel Silva III, Flowchem’s President. “Flowchem’s products and solutions for optimizing pipeline performance are strongly aligned with KMG’s existing offerings for the global energy services market, and our combined capabilities will enable us to more comprehensively serve our customers worldwide.”