Cabot agrees to buy KMG for $1.2 billion

Bloomberg

Cabot Microelectronics Corp. agreed to acquire KMG Chemicals Inc. for $1.2 billion in an effort to strengthen its position as a supplier to the semiconductor industry.
“KMG’s industry-leading electronic materials business is highly complementary” to Cabot’s portfolio in polishing pads for chipmakers, Cabot Chief Executive Officer David Li said in a prepared statement. “Its performance-materials business broadens our product offerings into the fast-growing industry for pipeline performance products and services.”
KMG shareholders will receive $55.65 in cash plus 0.2 Cabot share for each share of KMG stock.
The offer implies a value of $79.50 a share for KMG, according to the statement, a premium of 19 percent over its closing price on Tuesday. The companies valued the purchase at $1.6 billion including debt.
KMG jumped 14 percent to $76 before the start of regular trading in New York.
The shares had climbed 1.2 percent this year through Tuesday. Cabot dropped 4.4 percent premarket.