Chemtrade Logistics Income Fund to Acquire Polytec, a Provider of Turnkey Water Treatment Solutions

Executive Summary

• Chemtrade Logistics Income Fund has entered into an agreement to acquire Polytec, Inc., a southeastern U.S.-based provider of turnkey water treatment solutions, for US$150 million.
• The transaction values Polytec at approximately 6.5x LTM Adjusted EBITDA and is expected to close in the fourth quarter of 2025, subject to regulatory approvals and customary conditions.
• Chemtrade will finance the acquisition through its existing credit facility and expects to maintain ample liquidity and leverage post-closing.

Key Details

• Transaction Value: US$150 million.
• Valuation Metric: Approximately 6.5x LTM Adjusted EBITDA.
• Target Company: Polytec, Inc., founded over 30 years ago, providing turnkey water treatment solutions primarily to the food-processing industry and the municipal market.
• Strategic Rationale: Adds a unique solutions platform to Chemtrade’s water treatment chemicals products; leverages Chemtrade’s North American footprint and internal systems for cross-selling opportunities in the U.S. and Canada and more efficient management of business systems.
• Funding: Financed by drawing on Chemtrade’s credit facility.
• Closing Timeline: Anticipated to close during the fourth quarter of 2025.
• Conditions: Subject to regulatory approvals and customary closing conditions.
• Management Transition: Polytec founder Jack Harmon has committed to staying actively involved in the business for months following the close to ensure a smooth transition.
• Advisors: BMO Capital Markets served as financial advisor; Dorsey & Whitney LLP served as legal advisor to Chemtrade.

Notable Quotes

• Scott Rook, President and CEO of Chemtrade: “This transaction will enable Chemtrade to expand its footprint in water solutions for the food-processing industry and municipal markets while also adding to our range of products... Furthermore, the acquisition of Polytec is well-aligned with our strategy of growing the water business and represents an important step towards delivering on the growth pillars of Chemtrade’s Vision 2030.”
• Rohit Bhardwaj, CFO of Chemtrade: “Our successful leverage reduction strategy has provided Chemtrade with the financial flexibility to pursue compelling growth opportunities such as the acquisition of Polytec while continuing to maintain a conservative balance sheet and leverage within our target range without diluting our unitholders.”
• Jack Harmon, Founder of Polytec: “The combination of Polytec and Chemtrade will reinforce our manufacturing and service capabilities as we aim to use our knowledge, service, and products to keep our customers compliant with water quality regulations... I am confident that the combination of Polytec’s unique water treatment solutions and Chemtrade’s footprint will further accelerate our growth and the quality service we provide to our customers.”