OM Group buying Rockwood unit | Chemical & Engineering News
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Web Date: October 9, 2007

OM Group buying Rockwood unit

OM Group is trying to diversify, while Rockwood is focusing
Department: Business | Collection: Economy

Rockwood Holdings plans to sell its electronic chemicals business to OM Group (OMG) for $315 million. Fifty million dollars of that transaction depends on OMG exercising an option to purchase Rockwood's France-based electronic chemicals assets.

The business that OMG is purchasing had combined sales of $187 million and earnings before taxes of $35.4 million in 2006. Included in the transaction are materials used to make printed circuit boards, ultrapure wet-processing chemicals, and photomasks. Not included in the transaction is Rockwood's wafer reclaim business, also based in France.

"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," says Joseph M. Scaminace, OMG's chairman, president, and CEO. He added that the acquisition will also reduce the company's exposure to volatile metal prices. OMG's core business is making specialty chemicals derived from metals, particularly nickel and cobalt.

OMG is also trying to grow through acquisitions. The company, which had $660 million in sales in 2006, aims to have revenues of between $2 billion and $4 billion by 2010. Last month, OMG agreed to buy specialty coatings additives supplier Borchers. And earlier this year it sold its commodity nickel metal business to Norilsk Nickel.

Rockwood Holdings is also rearranging its business portfolio. Over the past year, it sold its Groupe Novasep fine chemicals business to the private equity consortium Gilde Buyout Partners and its U.S. wafer reclaim business to Wales-based Pure Wafer.

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