News: Suppliers
6 August 2024
Neo selling rare metals gallium trichloride plant in Quapaw, Oklahoma
Neo Performance Materials Inc of Toronto, Canada has entered an agreement to sell its equity ownership interest in Neo Rare Metals (Oklahoma) LLC in Quapaw, OK, USA – which produces gallium trichloride - to the facility’s general manager & co-founder Kevin Reading. The transaction continues Neo’s operational transformation and production optimization commitment to simplify global operations by “focusing on portfolio assets that reflect its scale and growth targets in a competitive global business environment”.
Reading has agreed to purchase Neo’s 80% equity interest in Quapaw for US$1.4m plus cash on closing (subject to normal closing adjustments), which represents a 9x multiple of the trailing 12 months of the EBITDA for the facility.
The transaction includes a five-year agreement for the purchase by Quapaw of gallium and indium from Neo’s recycling facility in Peterborough, Ontario, as well as for the processing and transfer of gallium scrap to the Peterborough recycling facility.
“The sale of the Quapaw facility back to its founder is an exciting opportunity for both of us to benefit in the long term,” believes Neo’s president & CEO Rahim Suleman. “I look forward to our continued partnership with the entrepreneurial owner-operator team at Quapaw,” he adds.
“Our relationship with Neo over the years has led this facility to improvements in health and safety initiatives that has truly made us a better facility,” says Reading. “Our strong management team will continue to work closely with our Neo partners to ensure that, together, we can meet the needs of both facilities and our customers’ needs.”
Subject to customary conditions to closing, the transaction is expected to close in third-quarter 2024.
