News Article
Neo Material Tech expands its gallium business
The firm has spent $6.5 million in order to expand its sales to gallium nitride LED manufacturers.
Neo Material Technologies has acquired an 80% interest in Gallium Compounds and plans to expand the Gallium Compounds business of gallium tri-chloride production to South Korea.
Gallium Compounds, based in Quapaw, Oklahoma is a provider of specialty value-added gallium products. Its primary business is the manufacturing of gallium tri-chloride, a critical material used in the production of LEDs. LEDs are used as indicator lamps in consumer electronics, backlight for flat panel displays and are increasingly penetrating other general lighting applications due to their superior energy efficiency and longevity.
With plans to replicate Gallium Compounds' proven technology for the production of gallium tri-chloride, design and construction of a new facility in South Korea is underway. This second manufacturing facility will be located in the Hyeongok Industrial Zone which is situated in the heartland of South Korea's booming LED industry. Commercial production at this facility is expected to commence by the third quarter of 2012.
The purchase price for Gallium Compounds was US$6.5 million, subject to working capital adjustments, plus a potential earn out payment which is dependent upon the performance of the Gallium Compounds' business from the date of closing to the period ending December 31, 2014.
"The acquisition of Gallium Compounds and the expansion into South Korea significantly strengthens our position in value-added gallium products and is an important step in our overall rare metals strategy", said Geoff Bedford, Executive Vice President and COO. "We look forward to working with our colleagues at Gallium Compounds to expand the business globally."
