CLEVELAND -- Under fire by an activist shareholder, OM Group has agreed to be acquired by a major private equity firm, which in turn will flip the PCB and photomask businesses to a third party.
Platform Specialty Products will buy OMG’s electronic chemicals and photomasks businesses in separate deals for a total of $365 million in cash. That deal will follow the initial sale of OMG to Apollo Management for about $1.03 billion, which is 28% over OM’s May 29 closing share price for the company. Closing is expected by year-end.
Following the transactions, the Apollo Funds will own OM Group's Magnetic Technologies, Battery Technologies and Advanced Organics businesses.
In a statement, Platform said it believes there is a synergy opportunity in excess of $20 million over the next two years from the combination of the electronic chemicals and photomask assets. Platform also acquired MacDermid, an OMG competitor, in 2013. OMG has been criticized of late by FrontFour Capital Group, a hedge fund that asserts that OM’s mergers and acquisitions strategy had “destroyed significant value.”
The Apollo deal is the largest in the US specialty chemicals industry since Platform agreed to acquire MacDermid for $1.8 billion in 2013. It is Platform's fourth chemicals acquisition in less than four years.
OMG acquired Electrochemicals in 2007.