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Molycorp agrees USD1.3bn deal to buy Canadian Neo Material
Friday 09 March 2012

9 March 2012 - US-based rare earth oxide (REO) producer Molycorp Inc (NYSE:MCP) will take over Canadian rare earth processor Neo Material Technologies Inc (TSE:NEM) for around CAD1.3bn (USD1.3bn/EUR994m), the parties said in a joint press release.

The combination would create a top global vertically integrated rare earth company, allowing Molycorp to enhance its time to market, add new global customers to its portfolio and benefit from increased growth opportunities and significant synergies, the buyer said.

According to the terms of the definitive agreement, Molycorp will pay CAD8.05 a share cash and 0.122 of its shares for each Neo Materials share, resulting in a price per share of CAD11.30. The cash portion will cover around 71.2% of the total price, with the remaining to be paid in stock.

The offered price is a premium of around 42% to the target's closing on 8 March, with the cash part to be financed via cash on hand and debt, the buyer said.

Through this acquisition Molycorp will expand its global presence across 11 countries, gain new technology and processing experience to improve its services to existing and new customers, it said.

The buyer also expects the deal to immediately boost its earnings and ensure strong future returns, it added.
Completion is anticipated in the second or third quarter of 2012, subject to clearance by Neo Materials shareholders and regulators.

Morgan Stanley & Co LLC, Jones Day, McCarthy Tetrault LLP and Cutfield Freeman and Co are acting as advisors to the buyer in this deal.

GMP Securities LP, Fogler, Rubinoff LLP, McDonald Hopkins LLC and Stikeman Elliott LLP advised Neo Materials.
Details
Date Published: 09/03/2012
Target: Neo Material Technologies Inc
Country: Canada
Deal Size: 1.3bn (USD)
Sector: Metals/Mining
Buyer: Molycorp Inc
Buyer Advisor: Jones Day, McCarthy Tetrault LLP, Morgan Stanley & Co LLC, Cutfield Freeman and Co

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