PHOENIX (dpa-AFX) - OM Group, Inc. (OMG) said Monday that it has signed definitive agreements to exit its Advanced Materials business.
The deals include the sale of the downstream portion of the business, including its cobalt refinery assets in Kokkola, Finland, to a joint venture to be held by Freeport-McMoRan Copper & Gold Inc. (FCX), Lundin Mining Corp. (LUN.TO) and La Generale des Carrieres et des Mines, for total potential consideration of up to $435 million, comprised of initial cash consideration of $325 million and potential future payments of up to an additional $110 million based on the business achieving certain revenue targets over a period of three years.
The sale is expected to close before the end of April.
'The divestiture of our cobalt business is the final step in exiting our legacy commodity businesses and is consistent with our strategy to move up the value chain into technology-based businesses with attractive growth prospects and more predictable earnings profiles,' said Joe Scaminace, Chairman and CEO of OM Group.
Following the close of the sale, the company expects to have total cash on-hand of over $500 million, which it expects to efficiently deploy to repay a substantial portion of its debt, repurchase up to $50 million of its shares, and support its strategy of profitable organic and strategic growth.
OM Group also said that its Board of Directors has authorized the repurchase of up to $50 million of its common shares. The authorization represents about 7% of the Company's current outstanding common shares based on last Friday's closing price.
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