The company manufactures specialty petrochemical products and waxes from its two plants in Silsbee, TX (30 miles north of Beaumont) and Pasadena, TX. It has revenues of $300 million.
The company was originally formed in 1967 as the Arabian Shield Development Company. The company’s original intent was to develop a copper and zinc mine in southwestern Saudi Arabia. It went public in 1972 and continued to raise funds to develop the mine.
In 1987, the company made its first acquisition in the US by buying the facility in Silsbee. By 2006, the company hived off the Saudi mine into a joint venture as it realized it would cost more than anticipated to complete it. The mine eventually started commercial production in 2012.
In 2015, the company changed its name to Trecora Resources. Its sold its 33% stake in the mine JV in 2019 for $70 million.
In late 2020, the company, with the help of its adviser, Guggenheim Securities, began exploring a merger-of-equals transaction in which Trecora would be the acquiror. However, in late summer 2021, after spending nearly $5 million in fees, the Board pulled out of the proposed transaction.
Also, in 2021, two separate activist shareholders, not acting in concert, amassed a combined 20% stake in the company. Both were critical of the Board and management’s strategy for the company. Both believed the company should put itself up for sale.
The company did just that in October 2021. It contacted 72 financial and strategic acquirers. After a formal bidding process, Balmoral won out, paying 11.4 times 2021 adjusted EBITDA.
All the officers of the company are staying on in their roles.
[06-30-22 – UPDATE Trecora filed an 8-K with the SEC. CEO Patrick Quarles has left the company to be replaced by new hire, Brad Crocker, who is currently the CEO of another portfolio company of Balmoral. Mr. Quarles will get a golden parachute payment of cash and equity worth $4.4 million.]