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Elementis agrees new terms for Mondo Minerals takeover
Posted on Tuesday, 11 September 2018 14:19
UK-based speciality chemicals maker Elementis has agreed to amend the terms of its offer for Mondo Minerals, the Amsterdam-headquartered manufacturer of talc products.

Elementis had initially agreed to pay an enterprise value of USD 600.00 million for the company, which was to be financed using a combination of equity and debt.

However, the group’s investors expressed some concerns regarding the deal, causing the acquiror to go back to the drawing board and explore various options.

According to a Reuters’ report, the issues raised primarily related to pricing and the shareholders were otherwise broadly in favour of the purchase.

As a consequence, new terms have been agreed which will see the buyer pay USD 500.00 million on a debt- and cash-free basis for Mondo.

In addition, a further earn-out component totalling USD 53.00 million may also be due at a later date, subject to certain performance-related targets being achieved in the three financial years running until the end of 2020.

Elementis plans to fund the deal using the proceeds of a rights issue, through which it hopes to raise around USD 230.00 million, as well as a USD 775.00 million term and revolving credit facilities agreement.

Under the terms of the rights issue, the company will issue one new item of stock for every four already held at USD 1.52 per share.

Elementis’ board has unanimously recommended that shareholders vote in favour of the revised acquisition terms. Completion is expected to follow by 23rd October.

The acquisition will represent an exit for Advent International, which paid EUR 400.00 million to pick buy the company from HgCapital Trust back in November 2011.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 254 deals targeting non-metallic mineral mining and quarrying companies announced worldwide since the start of 2018.

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