Bill Nelson in Houston Business Journal

06/19/2017

A deal that saw Fort Worth-based KMG Chemicals Inc. (NYSE: KMG) acquire Waller, Texas-based Flowchem LLC has closed, but the latter isn't likely to face major changes.

"KMG bought Flowchem - a pipeline products and services company - from Arsenal Capital Partners in a $495 million deal that closed June 15," said William Nelson, a Houston-based partner of Haynes and Boone LLP, which represented KMG in the deal.

"This is a customary deal that you would see a company in the industry complete as they are building up their portfolio," Nelson said.

Flowchem will continue to operate largely independently, and it will remain in the Houston area, said Eric Glover, investor relations manager at KMG.

"This is not an acquisition where we're trying to generate cost synergies from combining operations," Glover said.

He did say that there would be some upfront cost savings from integrating some things - like IT for instance - into KMG.

KMG has been building a presence in the pipeline products and services space in the past few years. It announced a deal to acquire Val-Tex, another Houston-based company, back in 2015, and it bought Seaweld - a Canadian company with a Houston office - earlier this year.

Excerpted from Houston Business Journal. To read the full article, click here.

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