Molycorp, Inc. and Neo Material Technologies Inc. signed definitive agreement in early March 2012 under which Molycorp will acquire Neo Materials for approximately C$1.3 billion in cash and Molycorp shares.
Neo Material Technologies is a producer, processor and developer of neodymium-iron-boron magnetic powders, rare earths- and zirconium-based engineered materials and applications, and other rare metals and their compounds through its Magnequench and Performance Materials business divisions. The company is headquartered in Toronto, Canada, and has facilities and offices in the United States, Germany, the United Kingdom, Japan, Korea, China, Thailand, Singapore and Barbados. Its products are essential in many high-technology applications.
Magnequench’s Neo powders are used to produce bonded magnets, generally used in micro motors, precision motors, sensors, and other applications requiring high levels of magnetic strength, flexibility, small size and reduced weight. Rare earth and zirconium applications include catalytic converters, computers, television display panels, optical lenses, mobile phones and electronic chips.
The acquisition will expand Molycorp’s technology portfolio to include production of magnetic powders and rare metals including gallium, indium and rhenium, as well as zirconium oxide. The company’s rare metals products are primarily used in the wireless, LED, flat panel, turbine, solar and catalyst industries.
“This transaction will link two unique companies, one with a world-class, high-quality resource and the other with world-class rare earth product design and processing capabilities,” Molycorp President and CEO Mark Smith said. “Neo Materials is recognized throughout the industry for its exceptionally high-quality production and processing capabilities, its patented technology platform, and its ability to consistently meet demanding customer specifications. With this combination, Molycorp will be in a unique position to enhance our time to market and provide new global customer segments with rare earth metals, oxides and alloy powders that are unmatched today. We see significant opportunities for growth as well as powerful synergies through this transaction.”
The transaction will be implemented through a court-approved Plan of Arrangement under Canadian law and is subject to the approval of Neo Materials shareholders, relevant regulatory approvals, and other customary closing conditions. The transaction is expected to close in the second or third quarter of 2012.