OM Group Significantly Expands Its Portfolio of Advanced Energy Materials and Technology With Planned Acquisition of Vacuumschmelze for euro 700 Million
By Om Group Inc., PRNEMonday, July 4, 2011
CLEVELAND, July 5, 2011 -
– Magnetic Engineering Company Represents OMG’s Most Significant
Step in Diversifying Business –
– OMG Continues to Push Closer to End Users in Fast-Growing End
Markets –
OM Group, Inc. (NYSE: OMG) today announced that it has signed a
definitive agreement to purchase Vacuumschmelze GmbH & Co. KG
(VAC) of Hanau, Germany, a global market leader in advanced
materials and specialty magnetics, for approximately euro 700
million, including $50 million in common stock equity.
Founded in 1923, VAC is widely regarded as one of the premier
designers, producers and marketers of the world’s most
technologically advanced materials and technologies, cores and
components, and permanent magnets for electronic equipment markets,
including the alternative energy, automotive, electric vehicles,
electrical installation, and energy conversion and distribution
segments. Among other things, the company has number-one global
market positions in its Materials & Parts and Cores &
Components units, and a leading global position in its Permanent
Magnets unit.
“The proposed acquisition of VAC will allow us to accomplish
several critical, strategic imperatives simultaneously,” said
Joseph Scaminace, OM Group’s chairman and chief executive officer.
“First and foremost, it will allow us to add another financially
strong, market-leading business to our portfolio of highly
specialized chemicals and metal-based materials, while preserving
our capital structure. Second, it will dramatically accelerate our
efforts to move closer to end users in stable and fast-growing end
markets, particularly alternative energy, where we have been
building a meaningful market position in photovoltaic materials and
chemicals as a result of new product development and grid
management and storage technologies through our acquisition of
EaglePicher Technologies.
“The addition of VAC will also immediately create the size and
scale necessary to further mitigate our exposure to raw material
pricing volatility and would bolster our R&D capabilities, as
VAC brings with it a broad intellectual property portfolio of more
than 750 patents and a robust pipeline of innovative new products
and technologies,” said Scaminace.
VAC has world-class production facilities in Germany, Slovakia,
Finland, China and Malaysia, with sales offices in 16 countries
worldwide. The company employs 4,500 people globally - including
160 scientists and engineers. According to Scaminace, “VAC is well
positioned - from both a geographic and market position standpoint
- to benefit from mega-trends related to alternative energy,
including power inverters for solar applications, magnetic
assemblies for direct-drive generators in wind turbines, and
materials and solutions for powering electric vehicles.” VAC’s
current management team will remain in place following the close of
the transaction.
In the 12-month period ending March 31, 2011, VAC recorded
revenues of approximately euro 389 million and operating profit of
euro 54 million, on an IFRS basis. Excluding one-time items related
to the acquisition, OM Group expects the acquisition to be
accretive to earnings in fiscal 2011. “From a financial
perspective, this is a highly attractive opportunity for us, as,
among other things, it will allow us to effectively invest our cash
located in Europe in a business that is already delivering mid-teen
operating margins and offers us double-digit growth potential under
OM Group’s strategic ownership, while delivering greater
shareholder value through more sustainable and less volatile
financial results,” said Scaminace. OMG plans to report VAC’s
operating results in a newly created segment upon completion of the
deal.
The proposed transaction is expected to close by the end of the
third quarter of 2011 and is subject to satisfaction of customary
closing conditions and regulatory approvals. The purchase price
will be subject to usual post-closing adjustments to net working
capital and other provisions for potential liabilities as defined
in the purchase agreement. The transactions will be funded through
a combination of cash on hand, stock and committed financing from
BofA Merrill Lynch, PNC Capital Markets, and BNP Paribas, subject
to customary terms and conditions.
WEBCAST INFORMATION
OM Group has scheduled a conference call and live audio
broadcast on the Web for 10 a.m. Eastern time today. Investors may
access the live audio broadcast by logging on to
Alternatively, investors and analysts inside the U.S. or Canada may
access the conference call by phone at 800-344-0734 during the
event or at 800-642-1687 to listen to the replay. Callers outside
the U.S. or Canada may dial 973-935-2082 during the event or
706-645-9291 to listen to the replay. The conference code is
80891262. A copy of management’s presentation materials will be
available on OMG’s website at the time of the call. The company
recommends visiting the website at least 15 minutes prior to the
webcast to download and install any necessary software. A webcast
audio replay will be available on the “Investor Relations -
Presentations” page of the company’s website three hours after the
call.
ABOUT VACUUMSCHMELZE
VACUUMSCHMELZE GmbH & Co. KG (VAC), based in Hanau, Germany,
designs, produces and markets advanced materials, primarily
magnetic but also with other physical properties, and related
products. VAC Group has annual sales in 2010 of approximately euro
350 million. Its more than 750 registered patents place it among
the world’s most highly innovative developers of advanced
industrial materials. VAC was acquired by One Equity Partners in
2005. For more information, visit
ABOUT ONE EQUITY PARTNERS
One Equity Partners is the private investment arm of JPMorgan
Chase & Co. and manages over $8 billion in commitments and
investments solely for the bank. OEP enters into long term
partnerships with companies to create sustainable value through
long term growth driven both organically and inorganically. Founded
in 2001, OEP has 39 investment professionals in New York, Chicago,
Frankfurt, Hong Kong and elsewhere around the globe. Visit
www.oneequity.com for more information.
ABOUT OM GROUP, INC.
OM Group, Inc., with fiscal 2010 net sales of approximately $1.2
billion, is a leading global solutions provider of specialty
chemicals, advanced materials, electrochemical energy storage and
unique technologies crucial to enabling our customers to meet
increasingly stringent market and application requirements. The
company serves a wide variety of sectors, including rechargeable
batteries, electronic devices, cutting tools, petrochemical
catalysts, electronics manufacturing, industrial coatings, defense,
aerospace, and medical devices. Headquartered in Cleveland, Ohio,
OM Group operates manufacturing facilities in the Americas, Europe,
Asia and Africa. For more information, visit the company’s website
at 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 recent natural
disasters in Japan and disruptions to the business environment in
that country; the operation of our critical business facilities
without interruption; the effect of non-currency risks of investing
and conducting operations in foreign countries, including
political, social, economic and regulatory factors; the
availability of competitively priced supplies of raw materials,
particularly cobalt; 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 direction and pace of our strategic
transformation, including identification of and the ability to
finance potential acquisitions; the potential impact that a
deterioration in global economic and financial market conditions
may have on our business and operations, including future goodwill
impairments; the impact on pension accounting if actual results
differ from actuarial assumptions; the effect of changes in
domestic or international tax laws; the effect of fluctuations in
currency exchange rates on the Company’s international operations;
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; and the general level of global economic activity
and demand for the Company’s products.
Troy Dewar, director, investor relations, +1-216-263-7765
Tags: Cleveland, July 5, Ohio, Om Group Inc.
