JACKSON, Miss.—Ergon Chemicals completed its acquisition of Resinall Corp. and three related properties, making its move into the specialty chemicals market on Aug. 1.
Ergon Chemicals, a wholly owned subsidiary of Ergon Inc., purchased Resinall Corp., Resinall Mississippi Inc., Industrial Transport Inc. and Resinall QALICB L.L.C. Financial details of the acquisition were not disclosed.
The Resinall companies will keep their names and continue to do business as they have for the past 30 years, as well as develop new products, said Craig Busbea, vice president of business development for Ergon Inc.
"They have a great reputation in the market, and they'll continue the progress," he said. "Where I think there's going to be synergy is going to be the integration of some of our products and technology."
Ergon Chemicals, a producer of base oils active in the rubber and tire market, started discussing a potential acquisition with Resinall in April 2017, Busbea said.
Resinall, a manufacturer of thermoplastic resins and polymers, was shopping potential companies through an investment banking firm, and Ergon was the best choice, said Jerry Johnson, vice president of operations for Resinall.
"It was a good fit culturally," he said. "We are extremely excited about the synergies offered in the market. We serve the same customers, but we serve them with very different product technologies, and we believe the combination of those technologies could be very attractive to our base."
As talks continued, Ergon Chemicals saw how Resinall's markets lined up with its own, with a strong presence in rubber, graphic arts and adhesives, Busbea said. Ergon Chemicals will bring to bear its knowledge of formulations to create synergy between the companies as they integrate.
"We've already started exploring some of those opportunities, and hopefully within the next few months or year, we'll be able to perhaps offer new products to the market," he said.
Beyond the overall complementary approach to the market, they shared cultural styles as well, said Chris Marquette, vice president of petroleum specialties marketing division for Ergon Inc.
"When we looked at Resinall, culturally, their level of customer service and their approach to how they serve the market, it was really duplicating what we would say Ergon did," Marquette said.
The move opens up the specialty chemicals market to Ergon Chemicals, Busbea said.
"Ergon is a refining company, it's a large asphalt company," he said. "We have a large logistics business, too. We were looking for something that complemented our existing businesses and acumen," he said. "The idea of moving into the specialty chemicals business is good for us because it's a way for us to leverage our relationships with customers without competing with our customers. It was a true adjacency, as opposed to a vertical-type integration."
Resinall also could find some integration with Ergon Chemicals' asphalt division, which uses polymer rubber, Busbea said. The company is in the process of exploring those possibilities.
From the Resinall side, Ergon Chemicals' access to technology in the refining industry might be able to help Resinall speed up its processes, Johnson said.
Ergon Chemicals operates two refineries, and Resinall operates two production plants, one located in Severn, N.C., and the other in Hattiesburg, Miss. Resinall's combined capacity is about 160 million pounds.
Busbea said Ergon Chemicals has a continued investment plan to grow both capacity and technology but could not share details.