Ashland Inc. ASH recently inked a definitive agreement to acquire OCH International, Inc. (“Oil Can Henry’s”), operating and franchising a total of 89 quick-lube stores in six states. The acquisition is anticipated to be wrapped up in the first quarter of 2016. However, financial details of the deal were not revealed.
Portland-based Oil Can Henry’s is the 14th largest quick-lube network in the U.S. and currently operates 47 company-owned stores and 42 franchise locations in Oregon (38 sites), Washington (29), California (11), Arizona (5), Idaho (3) and Colorado (3).
The acquisition will strengthen the existing Valvoline Instant Oil Change network of around 940 company-owned and franchise stores as well as mark Valvoline’s entry into the quick-lube space in several Pacific Northwest markets. Moreover according to Sam Mitchell, Ashland senior vice president and Valvoline president, the acquisition would unfold great growth opportunities for Valvoline in Oregon, Washington and other select markets as a part of the expansion of its store network.
Through this acquisition, Ashland also looks forward to deliver best in class customer services on the strength of the Valvoline brand and its industry-leading, quick-lube management tools. Moreover, the company thinks that the acquisition holds the potential to generate high returns on invested capital and increase the company’s quick-lube store count by nearly 10% along with expanding Ashland’s geographic footprint.
Valvoline Instant Oil Change service centers offer a stay-in-your-car solution for preventive maintenance needs. These include full-service oil change, transmission, radiator, gearbox and air-conditioning services, tire rotation, wiper blade, air filter, light bulb and serpentine belt replacement.
Shares of Ashland fell around 2.3% to close at $104.56 on Dec 11.
Ashland currently holds a Zacks Rank #4 (Sell).
Better-ranked companies in the specialty chemicals space include International Flavors & Fragrances Inc. IFF, Chemtura Corporation CHMT and Flexible Solutions International Inc. FSI, all carrying a Zacks Rank #2 (Buy).
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