OM Group to Acquire Electronics Businesses from Rockwood Holdings
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o 'Enabling acquisition' is key to growth of Electronic Chemicals platform
o Global businesses serve high-growth markets
o Transaction expected to be accretive in 2008
CLEVELAND, Oct. 8 -- 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.
o The PCB Chemicals business, operated as Electrochemicals, Inc.,
produces specialty and proprietary chemicals used in the manufacture of
printed circuit boards widely used in computers, communications,
military/aerospace, automotive, industrial and consumer electronics
applications.
o The UPC business is a leading supplier of ultra pure wet processing
chemicals and services to manufacturers of semiconductors, silicon
chips, wafers, liquid crystal displays and photomasks.
o The Photomasks business manufactures photo-imaging masks - high-purity
quartz or glass plates containing precision, microscopic images of
integrated circuits - and reticles for the semiconductor,
optoelectronics and microelectronics industries under the Compugraphics
brand name.
"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/.
FCMN Contact: Greg.Griffith@na.omgi.com
Source: OM Group, Inc.
CONTACT: Greg Griffith, vice president, strategic planning, development and investor relations, OM Group, Inc., +1-216-263-7455
Web site: http://www.omgi.com/
