Chemtrade Logistics agreed to sell its Montreal East business
to Suncor Energy for approximately $120 million, officials
said on Monday.
The business, which for a number of years provided services
to other refineries in the Montreal area, now provides sulfur
removal and compliance services only to Suncors
Chemtrade acquired the operation in 2011 as part of its
acquisition of Marsulex, and will realize a gain of
approximately $24 million on the sale. Chemtrade will also
recognize the remaining amounts receivable (approximately $11
million) pursuant to an agreement with a previous customer of
Chemtrade says it will continue to market sulfur and sodium
bisulphite produced by the Montreal plant and use net
proceeds of the sale to reduce debt.
The sale, which is subject to normal closing conditions, is
expected to close in June.
It was the right time for us to sell the operation to
Suncor, as owner of the sole refinery
being served by our
Montreal facility," said Mark Davis, CEO of Chemtrade.
"The sale price represents essentially the same multiple we
paid as part of the Marsulex transaction almost three years
ago," he continued. "Additionally, using the net proceeds to
reduce debt improves our debt to EBITDA ratio following the
recent acquisition of General Chemical, and the on-going
marketing agreements will continue to generate revenue for
Operationally, the Montreal facility is in excellent
shape and Suncor is gaining a skilled team that has provided
outstanding service for many years. We thank them for their
dedication and commitment to operational excellence.