Cabot divests supermetals business for $400mn
US-based specialty chemicals and performance materials firm Cabot has agreed to sell its Supermetals business to Global Advanced Metals (GAM) for a minimum of $400 million in total cash consideration, company officials announced on Thursday.
The transaction is subject to regulatory approval and is expected to close by the end of the 2011 calendar year.
GAM is a global leader in the supply of tantalum ore, a raw material used by the Supermetals business in the manufacture of high-end products to the electronics, aerospace, chemical manufacturing and other industries.
“We are pleased to have reached an agreement with GAM at an attractive value,” said Patrick Prevost, Cabot CEO. “While we have repositioned the Supermetals business to be a solid contributor to Cabot over the past two years, we believe that the specialty metals nature of this business does not fit the long-term direction for Cabot.”
Over the past eight quarters, the Supermetals business recorded an average quarterly EBITDA of $13 million.
The transaction includes an initial cash payment of $175 million when the transaction closes.
Additional cash consideration, including contingent payments based on the future performance of the acquired business, will total a minimum of $225 million and be paid within a two-year period.
Cabot will maintain its mining operation in Manitoba, Canada, where the company mines cesium for its specialty fluids business and tantalum.
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