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Ferro Corp. recently announced it has completed the sale of its precious metals-based powders and flakes product lines in North America and Asia to Ames Advanced Materials Corp., a wholly-owned subsidiary of Ames Goldsmith Corp., a producer of precious metal products. The transaction includes the manufacturing assets of the company’s South Plainfield, N.J., facility, including associated inventory. In addition, it also includes the assets of the company’s precious metals powders and flakes business line in Tsukuba, Japan. Through September 2013, these precious metals powders and flakes operations had value-added sales of approximately $23 million.
In addition to the asset sale, Ferro and Ames also entered into a seven-year supply agreement. Through the supply agreement, Ferro reportedly secures a reliable source of key raw materials for its downstream businesses while protecting its cost position.
The net cash proceeds from the sale were approximately $13 million. In addition, Ames provided Ferro with precious metals valued at approximately $43 million to satisfy its outstanding precious metal lease obligations.
“The sale of these assets is a result of our continuing business and asset portfolio evaluation process and the harvesting of underperforming and non-core businesses,” said Peter Thomas, president and CEO of Ferro. “This transaction allows us to redeploy assets into attractive growth opportunities. While the transaction will reduce projected value-added sales for the fourth quarter of 2013, we are not modifying our prior adjusted earnings guidance.”
The Ferro South Plainfield site and its approximately 160 employees join Ames as part of the transaction. The Ferro Tsukuba site and its employees will reportedly remain with Ferro.