Cabot Microelectronics Corporation completes acquisition of KMG Chemicals

Cabot Microelectronics Corporation (Nasdaq: CCMP), today announced that it has completed its previously announced acquisition of KMG Chemicals, Inc.  As a result of the acquisition, KMG has become a wholly owned subsidiary of Cabot Microelectronics.  Under the terms of the definitive agreement, each share of KMG common stock was converted into the right to receive $55.65 in cash and 0.2000 of a share of Cabot Microelectronics common stock, without interest and with cash paid in lieu of any fractional shares.

The acquisition will extend and strengthen Cabot Microelectronics’ position as one of the leading suppliers of consumable materials to the semiconductor industry.  Additionally, the combined company will be a leading global provider of performance products and services for improving pipeline operations and optimizing throughput.  The transaction is expected to be significantly accretive to Cabot Microelectronics’ free cash flow and adjusted earnings per share in year one, excluding any acquisition-related costs.

“I am pleased to announce that we have completed the KMG transaction.  We welcome KMG’s employees to our team and look forward to our journey together towards becoming the premier global provider of semiconductor and specialty materials.  We believe that our employees, customers and shareholders will benefit from this transaction as we become a stronger company, focused on providing high-performing and innovative solutions to our customers,” said David Li, President and CEO of Cabot Microelectronics.  “KMG’s industry-leading electronic materials business will expand our CMP product offerings with high-purity solutions used throughout the semiconductor manufacturing process.  We are also excited about the addition of KMG’s performance materials businesses to our portfolio which will allow us to expand our participation into new markets including the attractive, high-growth pipeline performance segment.”

In connection with the acquisition, Cabot Microelectronics borrowed $1.065 billion under a new senior secured term loan facility, the proceeds of which were used to finance in part the cash portion of the merger consideration, to repay KMG’s existing indebtedness and to pay fees and expenses related to the acquisition.  Cabot Microelectronics issued approximately 3.2 million shares of common stock to holders of KMG common stock for the stock portion of the merger consideration.


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