KMG Chemicals Buys OM Group Chemicals Unit for $60M
The target and acquirer both make chemicals used by electronics manufacturers
KMG Chemicals Inc. (NYSE: KMG) is acquiring the ultra-pure chemicals subsidiaries of OM Group (NYSE: OMG) for about $60 million in cash.
The pure chemicals group includes four facilities in Europe, two in Asia and one in North American. The North American facility sells products, mainly chemicals for electronics manufacturers, in the Cyantek brand name. The chemicals are used for cleaning, etching, stripping and other needs of semiconductor makers.
KMG produces and distributes chemicals for electronics manufacturers and wood-treating chemicals.
Houston-based KMG says the deal advances its strategy to get into the global high-purity process chemicals market. The company is funding the deal with available cash and borrowings under its revolving credit facility.
KMG amended its credit facility with Wells Fargo Bank and Bank of America from $60 million to $110 million. The accordion feature of the facility was also expanded to $135 million with approval from the banks.
OM Group develops magnetic technology, battery technology and specialty chemicals for the automotive systems, electronic devices, aerospace, industrial and renewable energy markets.
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