By John M. Vockley
Products continued its recent path of aggressive growth last week when it
purchased Royal Purple, a privately held commercial and industrial lubricants
producer in Porter, Texas, for approximately $335 million.
Founded in 1986, Royal
Purple produces consumer and industrial lubricants and shares a similar
customer base with Calumet “that will lead to substantial marketing synergies
between the two companies,” according to Calumet President and CEO Jennifer
with previous acquisitions of refineries from ConocoPhillips, Pennzoil and
Murphy Oil—improves Calumet’s “vertical integration,” Straumins said. Earlier
this year Calumet bought blender and distributor TruSouth Oil of Shreveport,
La., and Ashland subsidiary Hercules’ aviation and refrigerant lubricants
business in St. Louis, Mo. Terms were not disclosed for either transaction.
“All three of
these businesses [TruSouth, Hercules and Royal Purple], will integrate nicely
with each other. There are a lot of synergies between the three,” the Calumet
CEO said. She added that Calumet is a current supplier to Royal Purple as well.
acquisitions, Straumins said, “help us to vertically integrate our production
and our product line, moving closer and closer to the consumer.” Following this
strategy, Calumet intends on growing both the packaging and feedstock
operations. The company says it will
continue to seek opportunities to acquire other facilities that will help it
increase total refining capacity.
“We feel like
there are a lot of opportunities available to us,” Straumins said, but declined
to provide specifics. “Our business strategy is to take advantage of majors
leaving the space or small privately held companies deciding that they want to
move on and do something else. We will continue to acquire niche assets that
major oil companies no longer desire to have.”
Indianapolis-based Calumet has a base oil
plant in Shreveport with 7,000 barrels per day API Group II and 4,800 b/d Group
I capacity, and another in Princeton, La., with 6,900 b/d naphthenic capacity. It employs 900 people in the United
States and adds approximately another 100 from Royal Purple.
Straumins said Royal
Purple sells to a very diverse customer base in oil and gas, chemical and
refining, power generation, manufacturing and transportation. It is also
involved in drug manufacturing and the automotive aftermarket.
She said Purple
Royal’s customer base, product line and assets made it an attractive target.
Royal Purple reported full-year net sales for 2011 of $109.5 million. Straumins
said that Royal Purple “continues on the strong growth path” for 2012 that they
have exhibited over the last many years.”
to Royal Purple’s in-house formulation and R&D department as factoring into
the sale. “The technology that they have created over the last several years
has positioned them well for many years to come … They currently outsource some
of their production, so there is room for expansion and room for growing the
base line without significant capital expenditure.”
Straumins, the Purple Royal brand has expanded from about 500 retail outlets to
almost 25,000 over the last two years. While noting the strong commercial
growth, she said Royal Purple is more heavily weighted from a volume standpoint
to the industrial side of the business. “There are lots of opportunities” in
the oil, gas and wind market, she added.