11 April 2011

5N Plus completes MCP acquisition and $125m public offering

5N Plus Inc of Montreal, Canada has completed its acquisition of MCP Group SA of Tilly, Belgium (announced at the end of February) as well as its ‘bought deal’ public offering of 13,590,000 common shares at a price of $9.20 per share (yielding total proceeds of $125m).

Formed in September 2007 from the merger of specialty metal firms MCP Aramayo Ltd and Sidech SA, the private company MCP was majority-owned by co-CEOs Laurent Raskin and Frank Fache and Belgian industrial group Floridienne SA. It is the world’s leading producer and distributor of bismuth and bismuth chemicals (with market share estimated to be more than 50%) and a key player in other specialty metals (including gallium, indium, selenium and tellurium), used in products mainly related to industrial and electronic applications. MCP has about 400 staff in nine production sites and 15 commercial offices across Europe, Asia and the USA.

“We look forward to working with MCP in order to expand 5N Plus’ product offering and establish a worldwide manufacturing and distribution platform,” says 5N Plus’ president & CEO Jacques L’Écuyer.

Founded in 2000, 5N Plus focuses on specialty high-purity metals such as tellurium, cadmium, selenium, germanium, indium and antimony and also produces related II-VI semiconducting compounds such as cadmium telluride (CdTe), cadmium sulphide (CdS) and indium antimonide (InSb) as precursors for the growth of crystals for electronic applications, including solar photovoltaic, radiation detector and infrared markets. 5N Plus owns four material subsidiaries: 5N PV GmbH (Eisenhuttenstadt, Germany), Firebird Technologies Inc (Trail, BC, Canada), 5N Plus Corp (DeForest, WI, USA) and Sylarus Technologies LLC (St George, UT, USA).

MCP’s co-CEO Frank Fache will be appointed to 5N Plus’ board, which will consist of six directors. Co-CEO Laurent Raskin is expected to join the board at the next annual meeting of shareholders. Fache and Raskin will be appointed executive VPs, and will report directly to L’Écuyer.

5N Plus has acquired all of the issued and outstanding shares of MCP for: (i) a cash consideration of €105,793,548 (equal to CDN$142.8m as of 25 February, the last business day before the date of the acquisition agreement); (ii) promissory notes to the selling shareholders of MCP totaling €46,908,459 (CDN$63.3m), payable over a three-year period; and (iii) 11,377,797 common shares of 5N Plus issued to the selling shareholders (subject to lock-up provisions lasting up to 18 months). The purchase price also includes a cash ‘holdback’ of €14,970,785 (CDN$20.2m), payable by 5N Plus within three years.

Using the closing price of 5N Plus’ shares on the Toronto Stock Exchange on 25 February ($8) and the Euro to Canadian noon dollar exchange rate of 1.3494 on that date, the acquisition is valued at €235.2m (CDN$317.3m) in total. 5N Plus has also assumed MCP’s net debt (€65.6m as at end-December 2010, mostly short-term debt used to fund MCP’s working-capital requirements).

Investors in the ‘bought deal’ public offering received common shares in lieu of subscription receipts. The 13,590,000 shares were sold to a syndicate of underwriters led by National Bank Financial Inc and including GMP Securities LP, CIBC World Markets Inc, TD Securities Inc, Versant Partners Inc, Cormark Securities Inc, HSBC Securities (Canada) Inc, M Partners Inc and Stonecap Securities Inc. Net proceeds were used by 5N Plus to fund part of the cash portion of the MCP purchase (with the balance paid from cash on hand).

See related items:

5N Plus to acquire Belgian specialty metal firm MCP

Atlumin and MCP Wellingborough combine operations

Atlumin and Floridienne partner to supply and reclaim Cd-containing materials

Tags: 5N Plus MCP

Visit: www.5nplus.com

Visit: www.mcp-group.com

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