The distribution network, which generated $65 million in 2004, will be sold to Airgas.
Airgas has signed a non-binding letter of intent to acquire the Industrial Products Division of LaRoche Industries who distribute anhydrous ammonia and related services in the US.
The acquisition would include a nationwide distribution system of 24 locations and a fleet of more than 100 delivery vehicles. The business generated revenues of around $65 million in 2004 and employs more than 130 people. The acquisition is expected to be accretive in the first year.
Commenting on the deal, Airgas Chairman and Chief Executive Officer Peter McCausland said, \\$quot;This operation is a good strategic fit with our distribution infrastructure and would greatly strengthen our process chemicals platform acquired from Air Products in 2002. The LaRoche assets would broaden our infrastructure to include railcar distribution, which could be used for transportation of other products in our portfolio. Its primary customer base in the utility industry also fits well with a key industrial market for us.\\$quot;
The acquired operations and related personnel would become a new business unit known as Airgas Specialty Products, within Airgas' Gas Operations Division and accounted for with the All Other Operations segment in its financial results. The Gas Operations Division also includes Airgas Carbonic and Dry Ice, Airgas Nitrous Oxide, and Air Separation Unit operations.
Michel Rapoport, president of LaRoche Industries added, \\$quot;Upon a successful closing, the people of the Industrial Products Division of LaRoche can look forward to a stable and prosperous future as a member of the Airgas family. Our organization looks forward to working with Airgas on a smooth transition for our customers, who should see continued great service for their ammonia and related needs.\\$quot;
The Company expects to sign a definitive asset purchase agreement shortly and close the transaction at the end of May.