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Cabot Microelectronics Completes Acquisition Of KMG Chemicals

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Cabot Microelectronics has announced that it
has completed its previously announced acquisition of KMG Chemicals, Inc. As a result of the acquisition, KMG has
become a wholly owned subsidiary of Cabot Microelectronics. Under the terms of the definitive agreement,
each share of KMG common stock was converted into the right to receive $55.65
in cash and 0.2000 of a share of Cabot Microelectronics common stock, without
interest and with cash paid in lieu of any fractional shares.


The acquisition will extend and strengthen
Cabot Microelectronics' position as one of the leading suppliers of consumable
materials to the semiconductor industry.
Additionally, the combined company will be a leading global provider of
performance products and services for improving pipeline operations and
optimizing throughput. The transaction
is expected to be significantly accretive to Cabot Microelectronics' free cash
flow and adjusted earnings per share in year one, excluding any
acquisition-related costs.


“I am pleased to announce that we have
completed the KMG transaction. We
welcome KMG's employees to our team and look forward to our journey together
towards becoming the premier global provider of semiconductor and specialty
materials. We believe that our
employees, customers and shareholders will benefit from this transaction as we
become a stronger company, focused on providing high-performing and innovative
solutions to our customers,” said David Li, President and CEO of Cabot
Microelectronics. “KMG's
industry-leading electronic materials business will expand our CMP product
offerings with high-purity solutions used throughout the semiconductor
manufacturing process. We are also
excited about the addition of KMG's performance materials businesses to our
portfolio which will allow us to expand our participation into new markets
including the attractive, high-growth pipeline performance segment.”


In connection with the acquisition, Cabot
Microelectronics borrowed $1.065 billion under a new senior secured term loan
facility, the proceeds of which were used to finance in part the cash portion
of the merger consideration, to repay KMG's existing indebtedness and to pay
fees and expenses related to the acquisition. Cabot Microelectronics issued approximately 3.2 million shares of common
stock to holders of KMG common stock for the stock portion of the merger
consideration.



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