The Lubrizol Corporation and Croda International Plc have reached an agreement for Lubrizol to purchase Croda's refrigeration lubricants business. This business had revenues of approximately $84 million over the last twelve months.
The acquisition includes Croda's polyol ester and alkyl benzene refrigeration lubricant technology, Emkarate(R) and Icematic(R) brand names, customer lists, manufacturing know-how and complementary intellectual property. No manufacturing facilities are included in the transaction.
"This business complements our existing refrigeration lubricants business, which is served by our subsidiary, CPI Engineering Services, Inc., headquartered in Midland, Michigan. This is an example of Lubrizol's strategy to grow through bolt-on acquisitions that enhance existing product lines," stated Val Pakis, Lubrizol Additives' vice president of industrial products.
Phase out of ozone-depleting refrigerant gases and conversion to environmentally friendly chemistries required by the Montreal protocol and the Kyoto Accord are expected to drive market growth for new refrigeration lubricants. In addition, demand for refrigerators and air conditioners in developing countries is increasing, providing strong growth for the related lubricants.
In 2006, Croda acquired the refrigeration lubricants business as part of the Uniqema acquisition from Imperial Chemical Industries PLC. Following its acquisition, Croda determined that the refrigeration lubricants business was non-core.
The acquisition, which is subject to regulatory approvals, is anticipated to close early in the fourth quarter 2007. A small number of Croda employees are expected to become Lubrizol employees after the closing.