Neogen buy targets ‘one stop shop’
Chem-Tech's revenues for the most recent 12 months exceeded $14m and the purchase price, which was not disclosed, includes contingent payment consideration.
The 35-year-old company, which is owned by Pat and Kelle Rolfes, operates a manufacturing and distribution facility in Pleasantville, Iowa.
The majority of Chem-Tech's customers and distributors are Neogen customers and most have long-term relationships with both companies.
James Herbert, Neogen chief executive officer and chairman, said it has built a biosecurity product line to help producers of animal proteins ensure food safety inside the farm gate.
"We had already built a strong line of cleaners, disinfectants, rodenticides and veterinary instruments, along with a small product offering for insect control,” he said.
“The Chem-Tech business will significantly add to Neogen's position of being the 'one-stop shop' for meat, milk and egg producers.
“Chem-Tech's Turbocide products are also becoming popular for the fogging of food storage and warehouses."
Chem-Tech's insecticides use environmentally friendly technical formulas and several are approved for use in food factories.
The company's Prozap insecticide brand is known in the animal production industry, finding use with dairy and equine producers.
Neogen has shared the Prozap trademark with Chem-Tech for a few years, with the firm using the brand for certain rodenticides.
Reasons for growth
Pat Rolfes, Chem-Tech's chief executive officer, who will continue with Neogen in a consulting capacity, said the firm has grown due to effective insect control and meeting Environmental Protection Agency (EPA) standards.
"We have grown the business to a level that we felt it was best joined to a larger firm with more world-wide reach."
Dr Jason Lilly, Neogen's vice president of corporate development, said the move fits the model of supplementing organic growth through acquisitions.
"Like many of our acquisitions, we will be able to consolidate administrative, sales, and research and development with our existing groups.
“We expect to continue to operate the company's manufacturing facility in Iowa along with significant portions of its warehousing and distribution."
Aflatoxin test method
Meanwhile, Neogen has introduced a test method for the detection of aflatoxin M1 at low levels in dairy products.
Veratox for Aflatoxin M1 is intended for the quantitative analysis of aflatoxin M1 in milk, milk powder, butter and cheese.
The test is a enzyme-linked immunosorbent assay (ELISA) specific for M1, and allows users to obtain concentrations in the range of 5 to 100 parts per trillion (ppt) within 45 minutes of extraction.