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Cabot Corporation (NYSE: CBT) announced that it has entered into an agreement with Grupo Kuo S.A.B. de C.V. (KUOB.MX) to purchase the remaining 60 percent equity of its Mexican carbon black manufacturing joint venture,
NHUMO, S.A.de C.V, for $105 million, of which $80 million will be paid upon closing, excluding cash acquired. NHUMO is the leading carbon black producer in Mexico, and the acquisition will strengthen Cabot’s global carbon black business. This strategic asset in Mexico will also serve to meet the growing demand for carbon black throughout North America.
“This acquisition not only increases Cabot’s footprint in North America, but solidifies our global leadership position in the carbon black industry,” said Cabot President and Chief Executive Officer, Patrick Prevost. “This gives us expanded access to an important growth market in Mexico and immediate additional capacity to support the expansion of our customers in the U.S. Furthermore, it clearly demonstrates our ongoing commitment to delivering high quality products and services from local supply sources.”
With 18 plants globally, and capacity in excess of two million tons, Cabot is the world’s leading producer and marketer of carbon black. Cabot has owned approximately 40 percent of the joint venture since 1990. The plant has an annual capacity of 140,000 metric tons and is located in Altamira, Mexico. In fiscal 2012, the joint venture generated adjusted EBITDA of $41 million. The acquisition is expected to close by the fall of 2013, pending regulatory approvals.
“We are excited to bring this plant, and the NHUMO team, fully into the Cabot network,” said President of the Reinforcement Materials segment, Dave Miller. “Auto and tire manufacturers have been increasing capacity in the U.S. and Mexico which is driving demand for our high performance rubber black products. Through this acquisition, we will be well positioned to support the growing demands of our North American customers.”