Press Release
| OM Group to Acquire Electronics Businesses from Rockwood Holdings |
CLEVELAND, Oct. 8 /PRNewswire-FirstCall/ -- Taking another key step in implementing its long-range growth strategy, OM Group, Inc. (NYSE: OMG) today announced that it has agreed to acquire all of Rockwood Holdings, Inc's Electronics business, excluding its French entity, for approximately $265 million in cash. Rockwood's French electronic chemicals business is subject to a put option for an additional purchase price of approximately $50 million. The acquisition is expected to close by the end of 2007 and is subject to regulatory approval. The businesses supply customers with chemicals used in the manufacture of semiconductors and printed circuit boards as well as photo-imaging masks primarily for semiconductor and photovoltaic manufacturers. "These are attractive, profitable, cash-generating businesses that participate in high-growth markets and have a global asset base that will broaden our geographic footprint," said Joseph M. Scaminace, chairman and chief executive officer. "Moreover, they fit precisely with our transformation strategy and match up well with our current portfolio. We view this as an enabling acquisition that will allow us to build on our existing Electronic Chemicals presence through other synergistic transitions over the next two to three years." The Rockwood Electronics businesses, which had combined sales of $187 million in 2006, consist of Printed Circuit Board (PCB) Chemicals, Ultra Pure Chemicals (UPC) and Photomasks. The businesses employ approximately 700 people and have locations in the United States, the United Kingdom, France, Taiwan, Singapore and China.
"The businesses we are acquiring are led by strong management teams with extensive experience in the semiconductor industry," said Scaminace. "This will be a tremendous asset as we take advantage of the many opportunities to grow the Electronic Chemicals business." Scaminace noted that the continued growth of the Electronic Chemicals platform will meet a longstanding strategic objective to deliver more sustainable and predictable financial performance by reducing OMG's exposure to metal price volatility. OM Group's long-range growth strategy includes continued product innovation as well as tactical and strategic acquisitions. The strategy is part of a transformational process designed to deliver sustainable and profitable volume growth, drive consistent financial performance and build long-term shareholder value. Through the successful execution of this strategy, the company expects to achieve consolidated revenues of $2 billion to $4 billion by 2010 and rank in the top quartile of specialty chemical and specialty material companies in terms of EBITDA margins and other financial metrics. Over the past two years, OMG has already divested its commodity Nickel business, retired high-yield debt, implemented broad-based operational excellence initiatives, reshaped and expanded its board of directors, and completed a tactical acquisition in its existing Specialties business. OMG expects the Rockwood transaction, which is subject to standard closing conditions, to be accretive to earnings in 2008. ABOUT OM GROUP, INC. OM Group is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia and Africa. For more information, visit the company's Web site at http://www.omgi.com/. FORWARD-LOOKING STATEMENTS The foregoing discussion may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: the direction and pace of our strategic transformation, including our use of proceeds from the sale of our Nickel business on March 1, 2007 and identification of potential acquisitions; the successful acquisition of certain Electronics businesses of Rockwood Holdings, Inc. and integration of those operations; the operation of our critical business facilities without interruption; the speed and sustainability of price changes in cobalt; the potential for lower of cost or market write-downs of the carrying value of inventory necessitated by decreases in the market price of cobalt or the selling prices of the company's finished products; the availability of competitively priced supplies of raw materials, particularly cobalt; the risk that new or modified internal controls, implemented in response to the company's examination of its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, are not effective and need to be improved; the demand for metal-based specialty chemicals and products in the company's markets; the impact of environmental regulations on our operating facilities and the impact of new or changes to current environmental, health and safety laws on our products and their use by our customers; the effect of fluctuations in currency exchange rates on the company's international operations; the effect of non-currency risks of investing and conducting operations in foreign countries, including political, social, economic and regulatory factors; the effect of changes in domestic or international tax laws; and the general level of global economic activity and demand for the company's products.
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