Cargill to acquire Arkema in BP

A long-time Blooming Prairie manufacturer has been sold to a global food corporation that employs 140,000 workers in 67 countries.
Cargill, which is based in Minnetonka, has acquired Arkema, a Blooming Prairie company that began operations in the late 1960s. In making the announcement Monday, Cargill said the acquisition comes as demand for bio-based industrial solutions continues to grow.
Arkema officials said the company received an offer of $38.8 million, which is around 10 times historical EBITDA, a measure used to determine the overall financial performance of a company. Arkema generates about $40 billion in sales at its Blooming Prairie location. The deal is expected to close by the end of the year.
With the sale, Arkema is pursuing the repositioning of its portfolio on its core businesses, the company said in a press release.
After closing, the investment will give Cargill end-to-end production capabilities in bio-based plasticizers and polyols, and enable the company to better serve its industrial customers with nature-derived alternatives to traditional petroleum-based additives.
“Industrial customers are increasingly searching for solutions made without petrochemicals, especially in consumer applications where potential concerns around toxicity and sustainability continue to grow,” said Kurtis Miller, managing director in Cargill’s bioindustrial business. “Adding this capability will allow us to innovate across the polyol value chain, transforming our vegetable oil into highly functional compounds that bring benefits like flexibility, durability and heat stability to a wide range of industrial products.”
The Blooming Prairie plant specializes in epoxidized vegetable oils. The facility’s epoxide manufacturing process combines soybean oil and other vegetable oils with hydrogen peroxide, resulting in the oxidation of soybean/vegetable oil. These specialty oils, or epoxides, are key components for Cargill’s existing portfolio of bio-based plasticizers and polyols.
With this acquisition, Cargill will gain full control of their production process, transforming its commodity soybean oil into epoxides, and ultimately, creating the bio-based plasticizers and polyols used to make a broad range of products that support the conveniences of everyday life, such as shower curtain liners, tiles, carpets and furniture. 
By combining the Arkema manufacturing capabilities with Cargill’s bioindustrial expertise, the company expects to further support its plastics, automotive, medical, furniture, flooring and specialty chemicals customers with a broader portfolio of bio-based solutions for applications like polymer and lubricant modifiers, coalescing agents for paint and foam for furniture.
Cargill expects to offer the approximately 45 affected employees of Arkema in Blooming Prairie positions within the Cargill’s bioindustrial business, which in addition to bio-based plasticizers and polymers, also develops nature-derived solutions for construction, power generation, performance chemicals, and binders and adhesives.
The acquisition builds on other recent moves by Cargill to expand its presence in the bioindustrial space, including its recent partnerships to build a bio-butanediol facility, its acquisition of specialty beauty ingredient supplier, International Floratechnologies, and, together with its joint venture partner, PTT Global Chemical, develop a greenfield of an integrated NatureWorks facility in Thailand.
Arkema through its subsidiary, Viking Chemical Company, began operations in Blooming Prairie in 1969. Since that time, the plant has been an important contributor to the region’s economy with a total payroll of about $2.2 million per year.
The company has been honored with many top safety awards from the state over the years. Over the years the plant has installed sprinkler systems, constructed a wastewater pre-treatment plant and designed and installed spill containment systems in order to protect workers, the community and the environment.
Arkema has also been active with the Science Teacher Program in which teachers from various elementary schools spend a week at the plant to learn new hands-on science activities to take back to the classroom.
Cargill was founded in 1865 by William Cargill when he bought a grain flat house in Conover, Iowa. With revenues of more than $134 billion, Cargill is the largest private corporation in the U.S.