Cabot Microelectronics plans new debt financing for KMG purchase

By Sara Rosenberg

New York, Aug. 15 – Cabot Microelectronics Corp. plans on using about $1.1 billion of debt to help fund its acquisition of KMG Chemicals Inc. and refinance KMG’s existing debt, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

JPMorgan, Bank of America and Goldman Sachs & Co. LLC provided the debt commitment.

Under the agreement, KMG shareholders will be entitled to receive per share $55.65 in cash and 0.2 of a share of Cabot Microelectronics common stock. The transaction is valued at about $1.6 billion.

The combined company is expected to have annual revenues of around $1 billion and about $320 million in EBITDA, including synergies.

Closing is subject to customary conditions, including HSR clearance and approval by KMG shareholders.

Cabot is an Aurora, Ill.-based supplier of chemical mechanical planarization polishing slurries and CMP pads to the semiconductor industry. KMG is a Fort Worth, Texas-based producer and distributor of specialty chemicals and performance materials for the semiconductor, industrial wood preservation, and pipeline and energy markets.

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