Ocean Biochem shares up 110% after announcing merger agreement

Ocean Bio-Chem Inc (NASDAQ: OBCI) and OneWater Marine Inc (NASDAQ: ONEW) have entered into a definitive merger agreement whereby the latter corporation is to acquire the former. This announcement increased Ocean Bio-Chem’s stock price by 110%.

Bio-Chem Inc, a leading distributor, and supplier of maintenance, cleaning, and appearance commodities for the Powersports, automotive, recreational vehicles, and marine industry, will be acquired in an all-cash deal for about $13.08 per share, representing a total consideration price of roughly $125 million.

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Details of the transaction 

According to the deal, OneWater Marine Inc will also get Ocean Bio-Chem’s affiliate company, Star Brite Europe. Upon completion of the deal, both Star Brite Europe and Ocean Bio-Chem will merge into T-H Marine Supplies, a subsidiary and strategic growth company for OneWater’s parts and accessories businesses.

Being that Ocean Bio-Chem is a vertically integrated supplier, the company distributes, markets and manufactures a wide variety of commodities under the Odor Star, Star Tron, and Star Brite brands. Ocean Bio-Chem offers private label production, packaging, and blending for most of its products.

The company’s corporate headquarters are situated in Fort Lauderdale, with a manufacturing plant that ships products worldwide in Montgomery, Alabama.

OneWater Marine will finance the deal alongside a Trust bank extension of term loan facility. Both parties expect to complete this transaction by the end of the fourth quarter of the 2022 fiscal calendar. Ocean Bio-Chem’s financial advisers in the deal are Houlihan Lokey and its legal counsel is Morgan, Lewis & Bockius.

Management statements

Ocean Bio-Chem President and Chief Executive Officer, Peter Dornau said:

We are excited to be joining a team as passionate about their business as we are. With OneWater’s support and resources, we can implement promising new product lines. At the same time, we can also each leverage sales relationships across a combined portfolio to continue our histories of profitable growth.