OM Group Announces Agreements To Exit Its Advanced Materials Business

    OM Group Announces Agreements To Exit Its Advanced Materials Business

Transactions Complete Transition from Commodity to Higher Value-Add
Businesses, Enabling Company to Reduce Debt, Initiate a Share Repurchase
Program and Invest in Its Growth Strategy

PR Newswire

CLEVELAND, Jan. 21, 2013

CLEVELAND, Jan. 21, 2013 /PRNewswire/ --OM Group, Inc. (NYSE: OMG) today
announced a major step in its strategic evolution with the signing of
definitive agreements to exit its Advanced Materials business. The
transactions include the sale of the downstream portion of the business,
including its cobalt refinery assets in Kokkola, Finland, to a joint venture
to be held by Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Lundin Mining
Corporation (TSX:LUN) and La Generale des Carrieres et des Mines (Gecamines),
for total potential consideration of up to $435 million, comprised of initial
cash consideration of $325 million and potential future payments of up to an
additional $110 million based on the business achieving certain revenue
targets over a period of three years. The sale is expected to close before the
end of April 2013, subject to customary closing conditions and regulatory
approvals. OM Group also announced that its Board of Directors has authorized
the repurchase of up to $50 million of its common shares.

"The divestiture of our cobalt business is the final step in exiting our
legacy commodity businesses and is consistent with our strategy to move up the
value chain into technology-based businesses with attractive growth prospects
and more predictable earnings profiles," said Joe Scaminace, Chairman and CEO
of OM Group. "Following the sale, the Company will be well-positioned to
achieve its core strategic objectives with a strong balance sheet and a clear
vision for the future. We plan to return capital to shareholders via our
recently authorized share repurchase program, and we will continue to invest
in our businesses to support our growth strategy."

The Company said the transactions better position it to achieve its core
objectives to:

  oProvide specialized, value-added solutions for its customers' complex
    applications and demanding requirements;
  oExpand its leading positions in markets with attractive global growth
    trends, including automotive systems, electronic devices, aerospace,
    general industrial and renewable energy;
  oComplement its organic growth with synergistic acquisitions; and
  oMaximize total shareholder return through financial discipline, optimal
    deployment of capital, business growth and continued operational

Following the close of the sale, the Company expects to have total cash
on-hand of over $500 million, which it expects to efficiently deploy to repay
a substantial portion of its debt, repurchase up to $50 million of its shares,
and support its strategy of profitable organic and strategic growth.

In connection with the sale, OM Group will transfer its equity interests in
its DRC-based joint venture known as GTL to its joint venture partners,
subject to a security interest in favor of OM Group with respect to the joint
venture's performance of certain supply arrangements.

"I want to extend my appreciation to our Advanced Materials associates," said
Mr. Scaminace. "They have a long track record of operational excellence and
commitment to customer success. This transaction further strengthens the
business by providing a committed raw material supply stream and support from
one of the world's largest and most successful mining companies."


OM Group also announced that its Board of Directors has authorized the
repurchase of up to $50 million of its common shares. The Company may utilize
various methods to effect the repurchases, which may include open market
repurchases, negotiated block transactions, accelerated share repurchases or
open market solicitations for shares, some of which may be effected through
10b5-1 Plans. Any repurchases would be funded from cash on hand or borrowings
under the Company's credit facilities. The timing of repurchases will depend
on several factors including market and business conditions, and the
repurchases may be discontinued at any time. The authorization represents
approximately 7% of the Company's current outstanding common shares based on
last Friday's closing price.

"We believe the long-term intrinsic value of the Company, combined with our
increased financial flexibility following the exit of the Advanced Materials
business, create an attractive opportunity for repurchasing our shares," said
Mr. Scaminace. "We believe we have available capital resources to pursue
these share repurchases without disrupting our growth strategy, including
synergistic acquisitions."


The Company also commented that market conditions remained difficult
throughout the fourth quarter of 2012, particularly in Europe and in global
consumer electronics markets. The Company reiterated its expectation for no
rare earth pricing benefits in the fourth quarter of 2012 and stated that it
now expects a significant lower-of-cost-or-market charge to principally
reflect decreased rare earth prices.

"Business conditions became more challenging than expected in our recent
fourth quarter, and these conditions persist at the beginning of 2013," said
Mr. Scaminace. "As a result, we are now implementing a broad range of cost
reduction initiatives. These actions will contribute to our near-term
financial performance and improve our long-term cost structure, better
positioning the Company as macroeconomic conditions improve. The sale of the
Advanced Materials business further strengthens our balance sheet and provides
the capacity and flexibility to support these operating improvements as well
as our overall growth strategy." The Company plans to provide more a
comprehensive business update during its regular fourth quarter investor
conference call on February 19, 2013.


OM Group has scheduled a conference call for tomorrow, January 22, 2013 at
10:00 AM ET for Mr. Scaminace and Chris Hix, Chief Financial Officer, to
discuss the transaction with the investment community. The conference call
will be available via webcast at and by dialing +1-800-344-0734
(US/Canada) or +1-973-935-2082 and using the conference code #92004628.
Replays of the call will be available on the Company's website or by dialing
+1-855-859-2056 or +1-404-537-3406. Call materials will be available on the
Investor Relations section of the Company's website before the call.


OM Group is a technology-based industrial growth company serving attractive
global markets, including automotive systems, electronic devices, aerospace,
general industrial and renewable energy. Its business platforms use innovative
technologies and expertise to address customers' complex applications and
demanding requirements. For more information, visit the Company's website at


The foregoing discussion may include forward-looking statements for purposes
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based upon specific assumptions
and are subject to uncertainties and factors relating to the company's
operations and business environment, all of which are difficult to predict and
many of which are beyond the control of the company. These uncertainties and
factors could cause actual results of the company to differ materially from
those expressed or implied in the forward-looking statements contained in the
foregoing discussion. Such uncertainties and factors include: successful
completion of the sale of our Advanced Materials business; successful
execution of the GTL supply agreement signed in connection with the Advanced
Materials sale; risks arising from uncertainty in worldwide economic
conditions; extended business interruption at our facilities; fluctuations in
the price and uncertainties in the supply of rare earth materials and other
raw materials; our ability to identify, complete and integrate acquisitions
aligned with our strategy; restrictive covenants in our Senior Secured Credit
Facility which may affect our ability to operate our business successfully;
indebtedness may impair our ability to operate our business successfully;
changes in effective tax rates or adverse outcomes resulting from examination
of our income tax returns; the majority of our operations are outside the
United States, which subjects us to risks that may adversely affect our
operating results; level of returns on pension plan assets and changes in the
actuarial assumptions; the majority of our cash is generated and held outside
the United States; the timing and amount of common share repurchases, if any;
fluctuations in foreign exchange rates; unanticipated costs or liabilities for
compliance with environmental regulation; changes in environmental, health and
safety regulatory requirements; technological changes in our industry or in
our customers' products; our ability to adequately protect or enforce our
intellectual property rights; disruption of our relationship with key
customers or any material adverse change in their businesses; and the risk
factors set forth in Part 1, Item 1a of our Annual Report on Form 10-K for the
year ended December 31, 2011.

SOURCE OM Group, Inc.

Contact: Rob Pierce, Vice President, Finance, OM Group, +1-216-263-7489
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