Globe Specialty Metals, Inc. (GSM) announced the closing of its acquisition of Becancour Silicon Metal Inc's. "BSI" 51% equity interest in Quebec Silicon Limited Partnership or "QSLP" which owns a 47,000 MT silicon metal plant in Becancour, Quebec, Canada as well as certain leases of quartzite mines in Canada and other working capital assets.
The total cash purchase price for this acquisition is approximately a net of $34 million. Globe previously provided BSI $4.2 million of debtor-in-possession financing which was applied against the purchase price.
Globe will operate QSLP's silicon metal plant and will purchase approximately 51% of its finished goods output at a price approximately equal to the fully loaded cost of production and sell the material to third party customers. Dow Corning Inc. has the right to purchase the other 49% of the plant's output at a price approximately equal to the fully loaded cost of production. This arrangement is similar to the Company's existing joint venture with Dow Corning at its Alloy, West Virginia plant.
The acquisition was financed using $31.8 million from the Company's new $300 million revolving credit facility.
The facility includes 14 banks and is led by Fifth Third Bank and Bank of America Merrill Lynch and provides significant capital to finance acquisitions, growth initiatives, stock buy-backs, working capital and general corporate purposes.
After completing this acquisition the facility has approximately $172 million of availability, plus an accordion feature of $125 million, and the Company had $140.7 million of cash on hand at March 31, 2012.
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