Gulf Oil Corporation Ltd, a Hinduja Group company, has acquired Houghton International for $1.045 billion (about Rs 5,685 crore) through its subsidiary based in the United Kingdom.
This acquisition of 100 per cent stake in Houghton, a US-based global player in metal working fluids for industrial use, is subject to regulatory approvals.
The Hyderabad-based listed company signed an agreement for the acquisition on November 6, with the seller, a US-based private equity fund AEA Investors.
Subhas Pramanik, Managing Director, Gulf Oil, told
“We expect to close this acquisition by December end,” he said, adding that there were various synergies that could be achieved in manufacturing, strategic sourcing and distribution.
The deal is expected to strengthen Gulf Oil’s lubricant business in the automotive sector. The Indian major has acquired the US-based company that has thrice its (Gulf Oil’s) revenues and 10 times the EBITDA.
Houghton recorded, on a 12-month basis ending September, sales of $858 million and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of $132 million.
The US-based private equity fund AEA Investors had acquired Houghton in 2007. Houghton is into metal working fluids (MWF), and is especially strong in the North American and European markets. Since then, it has been on an acquisition spree and bought out Stuart Holdings GmbH as also Shell’s MWF business late last year.
Gulf Oil, in a statement to the BSE, has indicated it plans to operate Houghton as a separate company and the rest of Gulf’s operations will be able to use the US firm’s extensive base of industrial customers.
It is the second biggest acquisition by an Indian company this year. Rain Commodities had reached an agreement to buy Belgium-based speciality chemicals group Ruetgers in a $918-million deal.
Gulf Oil shares closed at Rs 86.35 on the BSE, down 1.43 per cent.