OM targets alternative energy market with $1bn acquisition

OM Group Inc. plans to purchase the German advanced materials firm Vacuumschmelze GmbH & Co. (VAC) for around €700 million ($1 billion).

Founded in 1923, VAC designs, produces and markets technologically advanced materials and technologies, cores and components, and permanent magnets for electronic equipment markets, including the alternative energy, automotive, electric vehicles, electrical installation, and energy conversion and distribution segments.

Joseph Scaminace, OM Group’s chairman and CEO, said the acquisition will enable to company to “dramatically accelerate our efforts to move closer to end users in stable and fast-growing end markets, particularly alternative energy.” OM has been working to build its position in the market for photovoltaic materials and chemicals, and recently boosted its new product development and grid management and storage technology capabilities through its purchase of EaglePicher Technologies.

VAC has production facilities in Germany, Slovakia, Finland, China and Malaysia, with sales offices in 16 countries worldwide. The company employs 4,500 people globally, including 160 scientists and engineers.

“VAC is well positioned — from both a geographic and market position standpoint — to benefit from mega-trends related to alternative energy, including power inverters for solar applications, magnetic assemblies for direct-drive generators in wind turbines, and materials and solutions for powering electric vehicles,” said Scaminace.

The proposed transaction is expected to close by the end of the third quarter of 2011.