Ingevity Corp. is making its third major acquisition by agreeing to pay $325 million to buy a manufacturer of pavement products.
The North Charleston-based global chemical maker announced Aug. 2 it plans to purchase privately held Ozark Materials LLC and an affiliated transportation business in an all-cash transaction.
The deal requires regulatory approval
Ingevity said it expects to finalize the purchase by early fall and fold the Greenville, Ala.-based company into its performance chemicals unit, which already makes asphalt additives.
"Today’s announcement represents an important step for Ingevity, strengthening our position in the paving construction industry while moving us one step downstream where we can better serve our end customers," CEO John Fortson said in a written statement.
Ozark Materials was described as "a leading producer of pavement marking materials," such as paints for striping and heavy-duty thermoplastic reflectors. Its customers in the U.S. and Canada include public transportation agencies, roadwork contractors, local governments, universities and airports.
The company has four manufacturing sites and a distribution center. The sale includes Red Oak, Texas-based Ozark Logistics LLC, which operates a fleet of delivery vehicles.
Fortson said the businesses are expected "to continue to benefit from several macro-level tailwinds, including increased infrastructure spending and the need for more road markings to support autonomous vehicles."
Ingevity expects Ozark to generate $150 million annually in revenue and contribute immediately to its bottom line.
The deal marks the O'Hear Avenue specialty chemical company's second-largest and third major acquisition since 2016, when it was spun off by paper giant WestRock.
Ingevity, which is listed on the New York Stock Exchange, previously paid $675 million for a U.K. manufacturer and $300 million for a chemical business that had been owned by Georgia-Pacific Corp.
The company also announced financial results Tuesday, reporting that its second-quarter revenue jumped 17 percent to $420 million as it raised prices "to help offset ongoing inflationary cost pressures." Net income surged more than one-third to $59.8 million compared to the April-June period of 2021.
Management will discuss the results and the Ozark deal with investors during a webcast starting at 10 a.m. Wednesday.