CSW Industrials, Inc. (NASDAQ: CSWI) and Pennzoil-Quaker State
Company dba SOPUS products (“Shell”), a wholly owned subsidiary of
Shell Oil Company that comprises Shell’s United States (“U.S.”)
lubricants business, announced today the execution of a definitive
agreement under which Whitmore Manufacturing, LLC (“Whitmore”), a
wholly owned subsidiary of CSWI, and Shell will form a joint
venture (“JV”) to market, distribute, and sell lubricants, greases,
coolants, reliability products, and related industrial services to
the North America rail and U.S. mining sectors. The JV, which
will be named Shell & Whitmore Reliability Solutions, LLC, is
expected to be owned fifty percent by each of Whitmore and Shell.
The JV will combine the strengths of Whitmore
and Shell to offer multi-sector expertise; advanced equipment
technologies and services; and an integrated product portfolio that
meets the unique needs of companies engaged in North America Class
I, II, and III rail (excluding municipal transit systems) and U.S.
mining (excluding quarries).
Joseph B. Armes, CSW Industrials Chairman,
President, and Chief Executive Officer, commented, “Today’s
announcement represents a first step toward offering a
comprehensive portfolio of products and solutions to rail and
mining customers. When Shell first approached us about this
opportunity to form a partnership, our team quickly realized the
value in an expanded commercial relationship with a world class
organization to drive accretive growth for shareholders, promote
proprietary products and technologies to customers, and increase
capacity utilization at Whitmore’s existing manufacturing
facility.”
“Whitmore and Shell customers are at the heart
of the rationale for creating this JV,” noted Machteld de Haan,
President of Shell Lubricants Americas. “The resilient B2B sectors
are key pillars for the future of Shell Lubricants, where we see a
lot of opportunity for growth to support the market. Partnering
with Whitmore, a leading provider of reliability products,
high-performance greases, friction modifiers, and rail products, in
creating this JV helps us to progress toward the execution of this
strategy.”
The JV will be staffed by Whitmore and Shell
sales and technical professionals with extensive experience in the
rail and mining sectors, enabling the successful transfer of
relationships, technical knowledge, and sector expertise. The
products manufactured and sold by the JV will benefit from Shell’s
and Whitmore’s proprietary industrial lubricant and grease
formulations and technologies.
A key part of the JV’s success will be its
manufacturing agreement with Whitmore. The JV’s production assets
will be co-located at Whitmore’s Rockwall, Texas facility and
operated by Whitmore, where the JV will benefit from Whitmore’s
scale and expertise. This structure is expected to optimize
Whitmore’s existing manufacturing capacity through increased
production output to be contributed by both Shell and Whitmore, and
to position the JV for future growth.
An additional benefit of the companies’
collaboration is an expanded commercial relationship between
Whitmore and Shell, which is expected to significantly broaden the
reach of Whitmore’s reliability products through Shell’s extensive
distribution channels throughout the Americas (excluding the JV’s
business sectors).
Armes added, “Through this JV and our expanded
distribution relationship with one of the premier brands in the
reliability industry, we expect to expand our reach across the
Americas and to enhance utilization at our world class Whitmore
Manufacturing facility in Rockwall, Texas. We look forward to
strengthening our partnership with Shell, while supporting the
effort with our decades of experience in the production of small
batch customized products for specialized applications.”
The JV is subject to customary closing
conditions and expects to commence operations in the first half of
calendar 2021. As Whitmore and Shell work toward the successful
formation of the JV, each company’s representatives will provide
separate communications to respective in-scope customers with key
information regarding the potential transition of business to the
JV.
About CSW Industrials
CSWI is a diversified industrial growth company
with well-established, scalable platforms and domain expertise
across two segments: Industrial Products and Specialty Chemicals.
CSWI's broad portfolio of leading products provides performance
optimizing solutions to its customers. CSWI's products include
mechanical products for heating, ventilation, air conditioning and
refrigeration ("HVAC/R") applications, sealants, and
high-performance specialty lubricants. Markets that CSWI serves
include: HVAC/R, architecturally-specified building products,
general industrial, plumbing, rail, energy, and mining. For more
information, please visit www.cswindustrials.com.
About Whitmore
Manufacturing
Whitmore is a global-provider of innovative
products and services that increase the reliability, performance
and lifespan of industrial assets. Whitmore manufactures high
performance lubricants, friction modifiers, application equipment,
lubrication management systems, desiccant breathers, and cleaners
designed to meet the specific needs of each industry and
application. Industrial customers worldwide rely on Whitmore to
deliver the performance engineered solutions industry counts on
even in the most adverse conditions and demanding
environments. For more information, please visit
https://www.whitmores.com/.
About Shell Lubricants
The term ‘Shell Lubricants’ collectively refers
to the companies of Royal Dutch Shell plc that are engaged in the
lubricants business. Shell Lubricants companies have led the global
lubricants industry by volume for more than 14 consecutive years.*
The companies manufacture and blend products for use in consumer,
heavy industrial, and commercial transport applications. The Shell
Lubricants portfolio of top-quality brands includes Pennzoil®,
Quaker State®, FormulaShell®, Shell TELLUS®, Shell RIMULA®, Shell
ROTELLA® T, Shell SPIRAX®, Shell Gadus®, and Jiffy Lube®.
http://www.shell.us
*Source: Kline & Company 2020, 18th Edition
Global Lubricants: Market Analysis and Assessment.
Safe Harbor Statement
This press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934,
which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, as amended. Words
or phrases such as "may," "should," "expects," "could," "intends,"
"plans," "anticipates," "estimates," "believes," "forecasts,"
"predicts," or other similar expressions are intended to identify
forward-looking statements, which include, without limitation,
earnings forecasts, effective tax rate, statements relating to our
business strategy, and statements of expectations, beliefs, future
plans and strategies, and anticipated developments concerning our
industry, business, operations, and financial performance and
condition.
The forward-looking statements included in this
press release are based on our current expectations, projections,
estimates, and assumptions. These statements are only predictions,
not guarantees. Such forward-looking statements are subject to
numerous risks and uncertainties that are difficult to predict.
These risks and uncertainties may cause actual results to differ
materially from what is forecast in such forward-looking
statements, and include, without limitation, the risk factors
described from time to time in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K.
All forward-looking statements included in this
press release are based on information currently available to us,
and we assume no obligation to update any forward-looking statement
except as may be required by law.
Investor Relations
Adrianne D. GriffinVice President, Investor
Relations, & Treasurer
214-489-7113adrianne.griffin@cswi.com
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