US-based chemical firm Cabot Corporation is to sell its Specialty Fluids business to Sinomine (Hong Kong) Rare Metals Resources, a wholly owned subsidiary of Sinomine Resource Group Co., in a transaction valued at US$135 million. The purchase price consists of US$130 million to be paid at closing, subject to customary closing adjustments, and additional cash royalties of up to US$5 million for lithium products, payable over a ten-year period. The transaction is expected to close in the third quarter of fiscal 2019 and is subject to customary closing conditions, including regulatory approvals. Earnings before interest, tax, depreciation and amortization (EBITDA) reported for the Specialty Fluids segment in fiscal year 2018 was US$10 million.
Sinomine is a joint stock public company based in China, principally engaged in the provision of geological exploration, mining investment and base metal chemical manufacturing.
“We are pleased to have reached a deal with the right strategic buyer to help the Cabot Specialty Fluids segment reach its fullest potential,” said Sean Keohane, Cabot President/CEO. “As we continue to execute our ‘Advancing the Core’ strategy, this transaction allows us to maximize the value of the business for our shareholders and focus our resources on advantaged growth initiatives in our core businesses. We view the Specialty Fluids segment as having the best growth potential under the ownership of a strategic partner focused on both mineral mining and downstream chemical manufacture. The Specialty Fluids segment will benefit from being part of a leading mineral industry player that will invest in its long-term growth.”
“As a company, we have been very disciplined in making the right strategic acquisitions to enable us to implement the mineral resources supply on a global scale. We specifically seek out opportunities that are based on mutual cooperation, benefit and respect,” Pingwei Wang, CEO, Sinomine Resource Group. “We admire Cabot’s commitment to safety, sustainability and innovation, and the accomplishments they have had in the Specialty Fluids business. We are pleased to be working with the Cabot Corporation team throughout this process and look forward to the opportunity to leverage our broad mining expertise to invest in this high potential investment.”