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Calgon Carbon To Acquire Japanese Joint Venture

Calgon Carbon Corporation    2/15/2010 11:23:00 AM    ReadCount:934

PITTSBURGH, Feb 12, 2010 (BUSINESS WIRE) -- Calgon Carbon Corporation announced today that it has signed a definitive agreement to acquire the shares of Calgon Mitsubishi Chemical Corporation ("CMCC") which it does not currently own. CMCC is a joint venture between Calgon Carbon Corporation and Mitsubishi Chemical Corporation ("MCC"). In 2008, CMCC recorded sales of approximately JPY 6.8 billion ($67 million).

Under the terms of the definitive agreement, Calgon Carbon will increase its current 49% ownership interest in CMCC to 80% at the closing, which is currently expected to occur on March 31, 2010. At closing, the company will be renamed Calgon Carbon Japan ("CCJ"). Calgon Carbon will acquire the remaining 20% interest in CMCC on or about March 31, 2011.

The total purchase price of the MCC shares, subject to adjustment for changes in net asset value, is JPY 951,000,000 (approximately $10.6 million). Of the total, JPY 722,810,146 will be paid at the closing on March 31, 2010, and JPY 228,189,854 will be paid in March 2011. Calgon Carbon will also assume MCC's share of CMCC's debt which is estimated to be JPY 714,000,000 ($7.9 million). The closing is subject to certain conditions typically associated with this type of transaction.

CMCC provides a full-range of outsourced activated carbon products to the Japanese market, including coal-based, granular activated carbon produced at Calgon Carbon's manufacturing facilities in the U.S. and China. Although by country Japan ranks second worldwide in the consumption of activated carbon, no coal-based activated carbon is currently manufactured there.

CMCC also produces and sells reactivated carbon in Japan, and included in the purchase price is a reactivation facility in Fukui, Fukui Prefecture, which is currently owned and operated by the joint venture company.

Commenting on the announcement, Leroy M. Ball, Calgon Carbon's chief financial officer, who has served on the joint venture's board of directors since its formation, said, "We are very excited about the opportunity to obtain sole ownership of a profitable business in a major geographical market with which we have had first-hand operating experience. And equally important, we expect to retain the majority of the workforce and leverage their experience to complement our existing Asian organization."

John S. Stanik, Calgon Carbon's president and chief executive officer added, "This is an important acquisition for our company. It represents a major step in implementing our strategic initiative to increase Calgon Carbon's presence in Asia, and significantly strengthens our core capability in that region."

"We expect the acquisition to be immediately accretive. However, our goals are to increase sales and profitability by introducing activated carbon products and services in Japan that are already well established throughout the world."