KEMET Corp., a listed manufacturer of tantalum, ceramic, aluminum, film, paper and electrolytic capacitors, will acquire all of the outstanding shares of Niotan Inc. from Denham Capital Management. Niotan has been a significant supplier of tantalum powder to KEMET for several years, the company said in a statement. Terms of the deal were not released.
KEMET Corporation (NYSE: KEM), a leading manufacturer of tantalum, ceramic, aluminum, film, paper and electrolytic capacitors, announced today that it has signed an agreement to acquire all of the outstanding shares of Niotan Incorporated (“Niotan”), a leading manufacturer of tantalum powders, from an affiliate of Denham Capital Management LP. Niotan has been a significant supplier of tantalum powder to KEMET for several years.
“This acquisition is in keeping with our announced strategic direction to vertically integrate operations and to better control supply sources as well as to contain our cost structure,” said Per Loof, Chief Executive Officer of KEMET. “Acquiring Niotan is a significant step in securing and stabilizing our tantalum powder resources. Additionally, we recently announced a comprehensive plan for sourcing conflict free tantalum ore from the Democratic Republic of Congo (DRC). We will continue to purchase a portion of our tantalum powder needs from our existing supply base. Together, these actions have put in place a supply chain that provides customers with confidence in the long-term viability of our tantalum capacitance solutions and will allow for faster to market development of specialty powders from KEMET,” continued Loof.
KEMET will pay an initial purchase price of $30 million at the closing of the transaction and additional deferred payments of $45 million over a thirty month period after the closing. KEMET will also be required to make quarterly royalty payments for tantalum powder produced by Niotan after the closing of the transaction, in an aggregate amount equal to $10,000,000 by December 31, 2014. The transaction is subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Act, and is expected to close in March 2012.
Niotan’s headquarters and principal operating location is in Carson City, Nevada. Niotan is the largest western hemisphere production location for tantalum capacitor powder and has demonstrated world- class powder quality which has resulted in exceptionally high level qualification with the world’s capacitor manufacturers.
Additional information regarding this acquisition will be provided this Thursday, February 2, at 9 AM EST, during KEMET’s Third Quarter Earnings conference call. Details on how to access the call can be found on kemet.com on the Investor Relations page.
KEMET’s common stock is listed on the NYSE under the symbol “KEM.” At the Investor Relations section of our web site at http://ir.kemet.com/, users may subscribe to KEMET news releases and find additional information about our Company. KEMET applies world class service and quality to deliver industry leading, high performance capacitance solutions to its customers around the world and offers the world’s most complete line of surface mount and through-hole capacitor technologies across tantalum, ceramic, film, aluminum, electrolytic, and paper dielectrics. Additional information about KEMET can be found at http://www.kemet.com.
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