Italmach acquires Compass, adds manufacturing base in North America
Italmach Chemicals has acquired Compass Chemical International, adding a strategically important site in Texas that it hopes will support its growth in the oil and gas industry.
The deal also broadens Italmach’s product portfolio to include biocides for the first time, and expands its range of corrosion inhibitors.
“Compass is very strong in, and committed to oil and gas, which is a strategic sector for us,” said Sergio Iorio, chief executive of Italmach. “The market is quiet in recent years, however we think that it has now reached a plateau, and we can only see a recovery in the medium term, which will be leveraged through the Compass acquisition.”
Italmach’s water additives business generates annual revenue “in the range of $150 million,” said Iorio, of which oil and gas accounts for 25 to 30 per cent, a share that it aims to grow.
Through the deal, Italmach gains a manufacturing base in North America for the first time, with plants in Georgia and Texas adding to the group’s existing manufacturing operations in Europe and Asia Pacific.
Compass is an independent producer of phosphonates and additives for water treatment and for the oil and gas market, and is known for the Mayoquest brand, which will continue.
“Manufacturing in the US is what we were missing — this acquisition makes us a global manufacturer,” said Iorio. “The Compass plant is very flexible, and our plan is to transfer manufacturing of some of our products that are currently imported from Europe into the US, to be more competitive and closer to the user.”
Iorio hopes that the tie-up will also bring benefits to Compass, particularly through a greater emphasis on research and development.
“Compass will benefit from the large research and development activity that Italmach has in Europe. The aim is to transfer such activity and to have a local North American research centre in Georgia, which Compass has on a small scale, but it will definitely benefit from the innovation that we are bringing,” said Iorio.
Italmach’s applicative laboratory in Milan, Italy, has the facilities to test finished formulations in a water system and in an oil and gas system, and is “close to some important developments in the field of high temperature anti-scale additives for deep oil and gas drilling,” Iorio added.
The latest deal follows a string of earlier moves by Italmach to grow its offer in water additives. In January 2016, it finalised the acquisition of Solvay’s water additives and desalination business, securing a position in thermal desalination, where previously it had played only in reverse osmosis.
In 2014, it bought GRS Chemical Technologies, the water soluble polymers plant and business of GE Water. Its initial entry into water additives was through the acquisition of Dequest in 2012.
Private investment firm Ardian took a majority stake in Italmach in 2014, and has backed the global specialty chemicals group’s acquisitions-led growth.