Axel Christiernsson announced Monday its acquisition of Royal Manufacturing, a deal that will triple Axels grease production capacity in the United States.
It has always been a big and strict part of their strategy to become the leading grease manufacturer in the U.S., Tom Schroeder, president of Axel Christiernssons U.S. subsidiary, Axel Americas, told a reporter.
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Royal Manufacturing, which is based in Tulsa, Oklahoma, will become a subsidiary of Axel Americas, operating as Axel Royal LLC. Royal Manufacturings RTW base oil terminal in Brownsville, Texas, was not included in the deal, but the companies declined to comment on the units future.
Financial terms of the agreement were not disclosed.
The two companies have discussed the possibility of a merger for quite some time, Schroeder said. Its something we have talked about many times, and now just happens to be the right time for [Royal Manufacturing President] Bill Mallory and Axel.
It also gives us a lot of flexibility for our manufacturing process, Schroeder noted. Axel Americas, he explained, has bigger kettles and is better equipped to handle larger manufacturing jobs. Royal Manufacturing, on the other hand, has smaller kettles, so its better equipped to handle smaller specialty products.
All Royal Manufacturing employees will be retained, and Mallory will stay on in a consulting role. The company has facilities in Tulsa, Oklahoma and Schertz, Texas.
For this year, were going to spend a lot of time trying to learn and understand Royal [Manufacturing] and how they did things, and I think thatll take up a fair amount of our time and attention. However, we would certainly entertain any sort of opportunity to grow and expand our operations, Schroeder said.
Royal Manufacturing provides a wide range of greases and high-performance oils. Its Brownsville terminal has been distributing base oils, primarily to Mexico, for over ten years. Axel Americas, based in North Kansas City, Missouri, is a subsidiary of Axel Christiernsson, one of the leading producers and suppliers of lubricating greases in Europe.