31 August 2011

Neo Material acquires 80% stake in Gallium Compounds

Neo Material Technologies Inc of Toronto, Canada (which produces neodymium-iron-boron magnetic powders, rare earths and zirconium-based engineered materials, as well as other rare metals and compounds via its Magnequench and Performance Materials divisions) has acquired an 80% stake in Gallium Compounds LLC of Quapaw, OK, USA.

As a supplier of specialty value-added gallium products, Gallium Compounds’ primary business is the manufacturing of gallium tri-chloride for applications including the production of light-emitting diodes (LEDs). Neo Material plans to expand the gallium tri-chloride production business into South Korea.

Design and construction is underway for a new manufacturing facility in the Hyeongok Industrial Zone, in the heartland of South Korea’s booming LED industry, with plans to replicate Gallium Compounds’ proven technology for the production of gallium tri-chloride. Commercial production is expected to start by third-quarter 2012.

The purchase price for Gallium Compounds was US$6.5m, subject to working capital adjustments, plus a potential earn-out payment which is dependent on the performance of the Gallium Compounds’ business from the date of closing to the end of 2014.

“The acquisition of Gallium Compounds and the expansion into South Korea significantly strengthens our position in value-added gallium products and is an important step in our overall rare metals strategy,” says executive VP & chief operating officer Geoff Bedford. “We look forward to working with our colleagues at Gallium Compounds to expand the business globally.”

Tags: LEDs Gallium

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