Innospec (IOSP) Acquires QGP Química

Innospec Inc. (NASDAQ: IOSP) today announced that it completed the acquisition of QGP Química Geral (“QGP”), a leading specialty chemicals company based in Brazil. Terms of the acquisition were not disclosed.

With this acquisition, Innospec now has a meaningful manufacturing, customer-service and product development base in South America which is one of the largest and most important global markets for all Innospec technologies. QGP also adds new surfactant and other specialty chemistries to Innospec’s global portfolio in important growth markets like Agriculture.

Founded in 1992, QGP has 300 employees. Innospec will integrate QGP into its Performance Chemicals business.

Patrick S. Williams, President and CEO of Innospec Inc. said, “We are very pleased to complete this acquisition. We have been highly impressed by QGP’s founders who have built a leading specialty chemical company backed by excellent customer service, innovation and technical support similar to our own. The product development and manufacturing capabilities of QGP complement every Performance Chemicals end-market that we serve including Personal Care, Agriculture, Home Care, Industrial Chemicals, Construction and Mining.”

Bruce McDonald, President of Performance Chemicals at Innospec added, “We are delighted to welcome QGP’s employees and its extremely complementary capabilities to Innospec. We are excited to now have a significantly stronger and broader offering for our customers both in Brazil and globally.”

Patrick S. Williams concluded, “This acquisition aligns with our long-stated M&A focus to further strengthen our Performance Chemicals segment and add a manufacturing base in South America. Following this acquisition, we continue to have an extremely strong, debt-free balance sheet and remain well-positioned for additional M&A, consistent shareholder returns, and organic growth investments.”

Use of Non-GAAP Financial Measures

The information presented in this press release includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (GAAP). These non-GAAP financial measures comprise EBITDA, income before income taxes excluding special items, net income excluding special items and related per share amounts together with net cash. EBITDA is net income per our consolidated financial statements adjusted for the exclusion of charges for interest expense, net, income taxes, depreciation, and amortization. Income before income taxes, net income and diluted EPS, excluding special items, per our consolidated financial statements are adjusted for the exclusion of foreign currency exchange (gains)/losses, amortization of acquired intangible assets, legacy costs of closed operations, acquisition related costs and adjustment of income tax provisions. Net cash is cash and cash equivalents less total debt. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided herein and in the schedules below. The Company believes that such non-GAAP financial measures provide useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and the Company has determined that it is appropriate to make this data available to all investors. While the Company believes that such measures are useful in evaluating the Company’s performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. Also, these non-GAAP financial measures may differ from similarly titled non-GAAP financial measures used by other companies and do not provide a comparable view of the Company’s performance relative to other companies in similar industries. Management uses adjusted EPS (the most directly comparable GAAP financial measure for which is GAAP EPS) and adjusted net income and EBITDA (the most directly comparable GAAP financial measure for which is GAAP net income) to allocate resources and evaluate the performance of the Company’s operations. Management believes the most directly comparable GAAP financial measure is GAAP net income and has provided a reconciliation of EBITDA and net income excluding special items, and related per share amounts, to GAAP net income herein and in the schedules below.

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