Globe Specialty Metals and FerroAtlantica in Merger Agreement

FerroAtlantica, a subsidiary of Grupo Villa Mir of Spain and Globe Specialty Metals Inc (GSM) of New York, NY have entered into a definitive agreement under which the two companies will combine in an all-stock transaction to create a leading international silicon and specialty metals producer. The new company will have a combined enterprise value of approximately US$3.1 billion, pro forma combined revenues of about US$2.3 billion and EBITDA of approximately US$325 million. It will have an expanded geographic reach, building on Globe’s footprint in North America and FerroAtlantica’s footprint in Europe. At close, Grupo Villa Mir will hold 57% of the new company and current Globe shareholders will hold a 43% stake. The transaction is subject to customary closing conditions, including Globe shareholder approval and regulatory approvals. Closing is expected to take place in the fourth quarter of 2015. Globe operates 11 production facilities and three mining sites in six countries, with almost 90% of its revenues coming from North America. FerroAtlantica operates 20 facilities (15 production sites and five mining sites) in five countries and hydroelectric power assets in Spain and France. The new company will benefit from an improved vertically integrated business model, with ownership of raw material sources close to production facilities. These include specialty coal, high-purity quartz, charcoal, wood chips, gravel and electrodes. Alan Kestenbaum, Globe’s executive chairman, commented, “Globe’s combination with FerroAtlantica creates a premier global player in the fast-growing silicon metal industry and combines two best-in-class companies. The deal gives Globe shareholders a company with greater international reach, a broader production base and opportunities for further cost reductions on an already low-cost platform.” Upon completion of the transaction, the two companies will be combined under a newly-formed holding company organized in the United Kingdom and headquartered in London. Jeff Bradley, current CEO of Globe, and Pedro Larrea Paguaga, current CEO of FerroAtlantica, will be co-CEOs of the new company.

Volume 29 issue 5

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