Calumet sells Royal Purple industrial assets for $110 million

INDIANAPOLIS - Calumet, Inc. (NASDAQ: CLMT), a diversified manufacturer of specialty branded products with annual revenues of $4.2 billion, has entered into a definitive agreement to sell the industrial segment of its Royal Purple business to a subsidiary of Lubrication Engineers, Inc. for $110 million. The transaction includes the sale of industrial lubricants and an exclusive license for their industrial applications. According to InvestingPro data, the company currently operates with significant debt obligations and weak profit margins.

The deal, which is anticipated to close in the first half of 2025, encompasses a range of Royal Purple’s synthetic industrial products, such as gear lubricants and hydraulic oils. In the previous year, this business segment generated sales of approximately $29 million.

Calumet will maintain the consumer side of Royal Purple, including popular automotive brands like High Performance Motor Oil and Max-Clean®, as well as the manufacturing site in Porter, Texas. The company plans to use the proceeds from the sale to primarily reduce its debt.

Scott Obermeier, EVP Specialties at Calumet, expressed that the sale reflects the company’s strategy to focus on its integrated specialties business. CEO Todd Borgmann also stated that the transaction aligns with Calumet’s goal to strengthen its balance sheet.

The company’s financial advisor for the transaction was Moelis (NYSE:MC) & Company LLC, with Faegre Drinker providing M&A counsel. Calumet operates twelve facilities across North America and is known for marketing specialty branded products and renewable fuels.

This news is based on a press release statement. The forward-looking statements included in the press release are subject to risks and uncertainties, and actual results may differ from those projected.

In other recent news, Calumet, Inc. announced significant financial developments, including the completion of major financial restructuring steps. The company utilized approximately $782 million from a U.S. Department of Energy (DOE) loan facility to repay and terminate existing asset financing agreements and loans. This move is part of Calumet’s strategy to streamline its financing structure, reflecting a significant reshuffling of financial obligations. Additionally, Calumet issued $100 million in senior notes due in 2028, intending to use the proceeds to redeem part of its outstanding 2026 senior notes. Meanwhile, UBS downgraded Calumet’s stock rating to "Sell," citing potential impacts on earnings due to changes in tax credits and competition in the industry. The company also reported a preliminary fourth-quarter net loss of up to $54 million, partially offset by insurance proceeds. This loss announcement coincided with the launch of a $65 million at-the-market equity offering program. These developments provide investors with a comprehensive view of Calumet’s current financial maneuvers and challenges.

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