Specialty chemicals maker TPC Group enters talks to go private for $600 mn: report

Specialty chemicals maker TPC Group Inc has entered into exclusive talks to go private for about $600 million excluding debt, Bloomberg yesterday reported, citing people familiar with the matter.

TPC, the largest producer of a chemical used in synthetic rubber, may get about $40 a share the report said.

Founded in 1944, Houston-based TPC, formerly known as Texas Petrochemicals, is a global leader providing a diverse range of products to global chemical and petroleum-based companies.

It is North America's largest producer of finished butadiene and the largest producer of butene-1. The company, set up by the US government to make synthetic rubber during WWII, is the sole producer of chemical grade diisobutylene in North America and the second largest active merchant producer of high purity isobutylene in North America.

The company, which competes with LyondellBasell Industries NV (LYB), Royal Dutch Shell Plc (RDSA), and Exxon Mobil Corp, went into bankruptcy in 2003, emerging from it a year later.

Its products are sold to a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuel additives, plastics and surfactants. Its products go into making the world's tires, carpets, gasoline additives and many other essential items used in every daily lives.

The company operates manufacturing facilities in the industrial corridor adjacent to the Houston Ship Channel, the heart of the world's largest chemical processing centre and has facilities in Port Neches and Baytown, Texas, as well as a product terminal in Lake Charles, Louisiana.

TPC, which is due to report its second quarter earnings on 2 August, reported first quarter net income of $18 million, or $1.14 per diluted share, up from $11 million or $0.70 per diluted share last year. Its quarter EBITDA was $45 million versus $35 million last year. "Excluding a $17 million positive impact of butadiene price changes, EBITDA was $28 million, up 2 per cent compared to prior year quarter on the same basis," it said in its quarterly earning report.