Quaker State Buys Specialty Oil Companies
OIL CITY, Pa. (AP) _ Motor oil maker Quaker State Corp. said Thursday it will double its lubricant sales and services business by buying Specialty Oil Companies in a deal worth about $131.5 million.
Specialty Oil, based in Shreveport, La., is a privately owned group of companies.
Herbert M. Baum, Quaker State’s chairman and chief executive, said the purchase will boost the company’s annual sales to nearly $1 billion.
Specialty Oil markets branded and private-label lubricants and antifreeze for automotive use, along with heavy-duty lubricants for fleet, commercial and industrial customers. The company also collects and recycles used oil, antifreeze, brake fluid and oil filters.
Baum said the purchase will help Quaker State realize its vision of being a ″cradle-to-grave″ lubricants company involved not only in oil production and marketing, but recycling.
″It’s a powerful partnership that will enable us to leverage our brands, our resources and our markets to greatly enhance Quaker State’s long-range prospects for continued growth,″ he said.
Quaker State will pay for the purchase partly through 4 million newly issued shares of stock, which at the closing price Thursday of $14.12 1/2 a share would be worth about $56.5 million.
In addition, Quaker State will pay $25 million for Specialty Oil as well as $10 million for related assets, and assume the company’s $40 million in debt.
The deal, which is subject to regulatory approval, is expected to close within 60 days.
Quaker State realigned its management as part of the purchase, creating a new office of the chairman and two vice chairmen.
Quaker State’s board extended Baum’s contract as chairman, president and chief executive through 1998.
David Myatt, president of Specialty Oil, will become vice chairman of Quaker State and president and chief executive of its new Motor Oil Division.
Conrad A. Conrad, Quaker State’s president and chief operating officer, will become the company’s vice chairman, chief administrative officer, and president of its satellite companies.
Specialty Oil has distribution facilities in 22 locations across the South. Its annual sales total more than $340 million.