Gulf Oil Corporation Ltd. (GOCL) of the Hinduja Group has, through a step-down subsidiary structure in the UK and the US, completed acquisition of 100 per cent stake in Houghton International Inc. for $1.045 billion after satisfactory conclusion of regulatory approvals.
Houghton has a global footprint, with sales in more than 75 countries supported by 12 manufacturing facilities in 10 countries. Houghton, a profitable company, recorded sales of $858 million and adjusted EBITDA of $132 million for the 12 months ended September 2012.
The acquisition which makes Gulf the world’s ninth largest lubricant company fits extremely well with Gulf’s existing lubricant portfolio and makes it a ‘full range’ lubricants company serving customers from automotive, metal working to energy, aerospace and marine. With a very strong industrial portfolio, it perfectly complements Gulf’s strong presence in the automotive lubricant sector.
GOCL will operate Houghton as a separate company, and the rest of Gulf’s operations will be able to leverage Houghton’s extensive base of industrial customers to offer them a complete end-to-end range of lubricants. Similarly, Houghton will be able to leverage Gulf’s existing global network. There are various other synergies that can be achieved in manufacturing, strategic sourcing and distribution.
The acquisition through the step-down subsidiary ensures that the financials of GOCL will not be affected. The debt will be serviced through Houghton International Inc.’s cash flows.
Mr. Sanjay G. Hinduja, Gulf Oil Chairman, said: “We are delighted that we have been successful in acquiring Houghton in the face of strong competition and shall strive to strengthen and support Houghton in the coming days”.