Korean consortium buying Momentive

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A consortium of Korean companies, led by leading Korean construction materials company KCC Corp. has agreed to buy US-based silicones and speciality materials supplier Momentive Performance Chemicals.

In a joint statement 13 Sept, the investor group said it would acquire Momentive in a transaction valued at approximately $3.1bn (€2.65bn), including the assumption of net debt, pension and OPEB liabilities.

Other consortium members include Seoul-based private equity company SJL Partners LLC and Wonik QnC Corp., manufacturer of quartz and ceramic wares for semiconductor wafers.

Based in Waterford, New York, Momentive develops and manufactures specialty silicones and silanes, as well as fused quartz and speciality ceramics products. The company, with 24 production sites and 12 research and development facilities globally, posted net sales of $2.3 billion in 2017.

“Today’s announcement is the result of a thoughtful and comprehensive review of the strategic growth and value creation opportunities available to the company,” said Jack Boss, chief executive officer and president at Momentive.

The transaction, Boss expects, will enhance Momentive’s position by expanding its portfolio of products, broadening its geographic reach and improving its financial position.

Also commenting on the deal, Steve Lim, chairman and managing partner of SJL described it as “highly strategic transaction”.

“The combination of Momentive’s leading product portfolios, KCC and Wonik’s reach into an expanded geographical market and SJL’s solid investment backing and private equity expertise will further position the Company for long-term success,” Lim noted. 

Under the terms of the agreement, the investor group will assume Momentive’s net debt obligations subject to minimum closing cash requirements of $250m. Momentive stockholders will receive $32.50 for each share of common stock they own subject to minimum closing cash requirements.

The transaction is expected to close in the first half of 2019, subject to regulatory approvals and other customary closing conditions.

Momentive launched a bankruptcy reorganisation plan in 2014, after listing $2.69bn in assets and $4.17bn in debt in its Chapter 11 filing in April that year.

In September last year, Momentive filed with the US Securities and Exchange Commission to make an initial public offering of shares to raise up to $100 million (€84 million). 

In November, however, the company postponed the planned IPO, citing adverse market conditions.

"While it is disappointing to have to postpone our initial public offering due to adverse market conditions, we had meaningful interest from the investment community in our company and have a strong financial position that will allow us to continue to execute against our multi-dimensional growth strategy," Jack Boss said at the time. 

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