BOSTON (June 18, 2013) — Carbon black producer Cabot Corp. has agreed to buy 100-percent control of its Nhumo S.A. de C.V. joint venture in Mexico to strengthen its position to supply growing demand for carbon black throughout North America.
Cabot will pay $105 million to Grupo Kuo S.A.B. de C.V. for Kuo's 60-percent share of the venture, which the partners set up in 1990.
Cabot describes Nhumo—with 140,000 metric tons of annual capacity at its plant in Altamira—as the leading carbon black producer in Mexico. The venture generated annual sales of $188 million and EBITDA of $24 million for the year ended March 31, Grupo Kuo said.
The parties expect the acquisition to close by this fall, pending regulatory approvals.
"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 CEO 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."
With 18 plants globally and annual capacity in excess of 2 million tons, Cabot claims to be the world's leading producer and marketer of carbon black.
Cabot said it expects the deal to yield about 15 cents a share in accretive earnings in fiscal 2014, excluding one-time costs, as well as 5 to 10 cents a share in additional operational synergies within the next two to three years.