Neo Performance Materials sells Quapaw rare metals facility
August 9, 2024
Neo Performance Materials Inc, headquartered in Toronto, Canada, has announced that it has entered into an agreement to sell its equity ownership interest in Neo Rare Metals, LLC, Quapaw, Oklahoma, USA, to Kevin Reading, the current General Manager and co-founder of the facility. The transaction is said to continue Neo’s drive to simplify its business globally, by focusing on portfolio assets that reflect the company’s scale and growth ambitions in a competitive global business environment.
Reading has agreed to purchase Neo’s 80% equity interest in the Quapaw location in consideration for an aggregate cash purchase price equal to $1.4 million plus cash on closing, subject to normal closing adjustments, which represents a 9.0X multiple of trailing twelve months of the EBITDA of the facility.
The transaction is part of Neo’s operational transformation and production optimisation commitment to simplify global operations. It includes a five-year agreement for the purchase by Quapaw of gallium and indium from the company’s recycling facility in Peterborough, Ontario, as well as for the processing and transfer of gallium scrap to the company’s Peterborough recycling facility.
“We continue Neo’s global transformation and optimisation of our asset base. The sale of the Quapaw facility back to its founder is an exciting opportunity for both of us to benefit in the long term. I look forward to our continued partnership with the entrepreneurial owner-operator team at Quapaw. Mr Reading has always been a valued partner and great business leader. We are excited for Kevin, the team at Quapaw and for the continued growth opportunities for this facility as a focused entity,” stated Rahim Suleman, president and Chief Executive Officer of Neo.
“We are thrilled to purchase back the business we founded as we look to grow operations in Quapaw, Oklahoma,” shared Kevin Reading, General Manager of Quapaw. “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. 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.”
The transaction is subject to customary conditions to closing and is expected to close in the third quarter of 2024.
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