December 16, 2016 / 4:39 AM / a year ago

UPDATE 1-Chemtrade Logistics to buy chemical maker Canexus

(Adds details)

Dec 15 (Reuters) - Chemtrade Logistics Income Fund said it would buy chemicals and handling company Canexus Corp for C$1.65 in cash per share, as it looks to expand its existing platform and markets.

The deal, which reflects an enterprise value of about C$900 million ($675.22 million) for Canexus, was reached on an arrangement transaction with unanimous board support, Chemtrade said in a statement.

“The successful completion of the arrangement will strengthen and expand Chemtrade’s existing platform while further diversifying our North American operations and allowing us to enter attractive South American markets,” Chemtrade Chief Executive Mark Davis said in a statement.

Chemtrade, a supplier of industrial chemicals, had increased its takeover offer to C$1.65 per share on Tuesday. Reuters had earlier reported the discussions.

Canexus rebuffed a C$1.50-per-share unsolicited offer in October, saying the C$297.2 million bid undervalued the company. Chemtrade initially offered C$1.45 per share.

Chemtrade said it has sufficient capital to fund the deal from available cash resources and from firm committed financing.

Canexus, which owns sodium chlorate and chlor-alkali plants in Canada and Brazil, will recommend its shareholders vote in favor of the transaction, it said in a separate statement.

A deal for Canexus to be acquired by Canadian chemical maker Superior Plus Corp fell through earlier this year.

CIBC World Markets and The Valence Group acted as financial advisers to Canexus. BMO Capital Markets acted as financial advisers to Chemtrade.

Chemtrade shares had closed at C$18.14 on Wednesday while Canexus closed at C$1.64.

$1 = 1.3329 Canadian dollars Reporting By Aurindom Mukherjee in Bengaluru; Editing by Sunil Nair

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