Engineered Custom Lubricants acquired Lubricant Technology Inc. and its Christo-Lube brand of synthetic lubes last month for an undisclosed price.
ECL plans to expand LTIs three-acre fluorinate chemicals plant in Franklin Furnace, Ohio, where it develops, manufactures, and markets the Christo-Lube brand. LTI formulates the synthetic lubricant from fluorinated polysiloxanes, perfluoropolyethers, esters polyalphaolefins (PAOs), and synthetic hydrocarbon co-oligomers for high-temperature and highly-stable applications in military aircraft, aerospace and other industries.
Paul Bedford, ECLs co-owner and vice president of sales and marketing, told Lube Report that the acquisition was preceded by a partnership established in 2010. Bedford pointed out that there are only four significant manufacturers of perfluoropolyether (PFPE) base oils in the world, including Dupont Chemical and Kl ber Lubrication, which control pricing through relationships with formulators and blenders such as LTI. Its a classic chicken and egg scenario-it is hard to compete without good pricing and hard to get good pricing without volume, Bedford said. ECL needed a strong position in PFPEs to become a world-class grease provider.
ECL also pointed out that the acquisition fits in with its overall growth strategy, which will include another buy soon. The acquisition enhances our design capabilities, adds new special packaging capabilities, increases our manufacturing capacity and expands our footprint in several key industries, said Ian Rowell, ECLs co-owner. Acquisitions are a critical part of our growth strategy.
In the three years since former BP executives Rowell and Bedford purchased ECL, the company has made several significant growth plays. Bedford explained that the company expects its revenue to grow from $4.9 million in 2009 to around $30 million next year with the LTI acquisition.
- 2010 – Commissioned two warehouses in Belgium and China.
- 2011 – Moved headquarters from Plymouth, MI., to Aurora and expanded to an 18,600 sq. ft. building.
- 2012 – Bought another production facility, which increased its manufacturing space to 49,000 sq. ft.
- 2012 – Established ECL GmbH, a wholly owned subsidiary in Hamburg, Germany.
The specialty grease firm said its next deal will be for a European company in 2014. We are working closely with two companies on an acquisition in western Europe that both have a strong presence, expertise, and brand, Bedford said. Closing acquisitions is a challenging and very emotional game that has poor odds on completion-around one success comes from 500 acquisition interest conversations.
Founded in 1954, ECL is a privately held company that specializes in first-fill specialty greases and coatings for original engine manufacturers (OEMs).