Dickson, Tennessee – Zinc Oxide LLC has acquired Zochem Inc., a subsidiary of American Zinc Recycling Corp. LLC, in a deal that is projected to create the largest supplier of zinc oxide in North America.
Zinc Oxide said in a news release that the combined companies will generate about $250 million in 2017 sales with a capacity of 95,000 metric tons. The pair are approved suppliers of about 88 percent of the total North American zinc oxide market volume, Zinc Oxide said in a Sept. 29 news release.
The firm added that Zochem's extensive domestic and global distribution network also will remain in place. Financial details were not disclosed.
"The combination of Zinc Oxide and Zochem has been a long-term goal of our ownership and management," Zinc Oxide CEO Russ Robinson said in a statement. "Our team has long admired Zochem for its market breadth, operations and management capabilities."
Ed Smith, senior vice president of sales and marketing, added in a statement that the acquisition will allow customers to benefit from reduced shipping costs and transit times.
"Our team is very charged up about working with our new colleagues at Zochem," Smith said. "The combination of personnel, expanded sales network and facilities gives us the best of the best. With our added depth of capabilities and global reach, the new company has tremendous growth opportunities."
Founded in 1933, Zochem has been located in Brampton, Ontario, since 1974. Zinc Oxide said the deal includes all of Zochem's manufacturing operations and product lines. Both Zochem's Brampton and Zinc Oxide's Dickson site will continue to manufacturing zinc oxide using the French process method.
American Zinc Recycling, formerly Horsehead Holdings L.L.C., emerged from Chapter 11 bankruptcy in September 2016 after the U.S. Bankruptcy Court for the District of Delaware confirmed its reorganization plan. The plan eliminated nearly all of the company's debt and converted about $205 million of senior secured debt into equity in the reorganized firm.
At the time of the initial filing, Zochem said its side of the business was financially stable being operated as a stand-alone subsidiary. It was included in the bankruptcy filing because it could provide support and collateral for the investors looking to provide interim, debtor-in-possession financing.