Cabot Corp to sell supermetals business to Australia’s GAM for $400 million

Cabot Corp, the US-based specialty chemical company today agreed to sell its supermetals business to Australia's Global Advanced Metals (GAM) for $400 million in cash, in order to focus on its core business.

Founded in 1882, Boston, Massachusetts-based Cabot is a global specialty chemical and performance materials company that makes products like carbon black, fumed silica, inkjet colorants, aerogel, capacitor materials, and cesium formate drilling fluids among others.

Over the past eight quarters, the Supermetals business recorded an average quarterly EBITDA of $13 million. Cabot will maintain its mining operation in Manitoba, Canada where the company mines cesium for its Specialty Fluids Business and tantalum.

The transaction, which is expected to close by December, includes an initial cash payment of $175 million with the remaining to be paid within a two-year period, Cabot said in a release.

Cabot, which operates 39 manufacturing facilities located in the US and 20 other countries, said that it will use the funds from the deal to pursue potential acquisitions and focuses on its rubber black business that contributes to about 72 per cent of its revenues.

Cabot is the second largest producer of carbon black in India. Carbon black is sold to tyre producers. It acquired a majority 60 per cent stake in United Carbon and changed the name to Carbon India.

West Perth, Australia-based GAM, whose tantalum is used in Apple's iPods and BlackBerry smart phones is a global leading supplier of tantalum ore, which is an used in a range of cutting-edge products, particularly in the electronics industry in the production mobile phones, digital cameras, laptops, computer monitors and televisions.