Oaktree Capital’s Neo Performance Materials files for initial public offering (IPO)

Photo of author

By Ted Liu

Neo Performance Materials Inc. has filed a preliminary prospectus for a proposed initial public offering (IPO) by way of secondary offering.

Prior to the completion of the offering, Neo Performance Materials Inc. and Neo Cayman Holdings Ltd. (Neo Cayman) intend to complete a Cayman Islands scheme of arrangement pursuant to which Neo Performance Materials would acquire all of the outstanding ordinary shares of Neo Cayman in exchange for an aggregate of 39,878,383 common shares, a portion of which would constitute the offered shares to be offered for sale to the public in the offering.

The offering contemplates a secondary offering of common shares by the company’s majority shareholder, OCM Neo Holdings (Cayman), L.P., an affiliate of funds and accounts managed by Oaktree Capital Management, L.P. The number of shares to be sold and the price per share have not yet been determined.

Following the closing of the re-organization, OCM Neo Holdings (Cayman) owns 37,996,100 common shares or 95% of the outstanding common shares.

Scotiabank and RBC Capital Markets are acting as joint bookrunners for the offering, and Cormark Securities is acting as co-lead underwriter for the offering. Fogler, Rubinoff LLP and Stikeman Elliott LLP act as legal counsels to Neo Performance Materials and the underwriters respectively.

Neo Performance Materials is a global leader in the innovation and manufacturing of rare earth- and rare metal based functional materials, which are essential inputs to high technology, high growth, future-facing industries. The business of Neo Cayman, the current parent company, is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. The company is headquartered in Toronto with corporate offices in Greenwood Village, Colorado, and Beijing, China. The company operates globally with sales and production across 10 countries, being Japan, China, Thailand, Estonia, Singapore, Germany, United Kingdom, Canada, United States, and South Korea.

Neo Performance Materials ‘s operations trace back to AMR Technologies Inc. formerly a TSX listed company.

In 2005, AMR completed the acquisition of Magnequench, Inc. combining the rare earth processing business of AMR and the magnetic powder production businesses of Magnequench, Inc. In June 2006, AMR changed its name to Neo Material Technologies Inc. (NEM)

In 2012, NEM was acquired by Molycorp, Inc. for $1.3 billion. In June 2015, Molycorp, together with certain of its subsidiaries, filed a voluntary petition of reorganization under Chapter 11. In July 2015, Oaktree provided debtor-in-possession financing to Molycorp. On August 31, 2016, certain of Molycorp’s subsidiaries emerged from Chapter 11 protection, and $1.7 billion of Molycorp’s debt (which included debt owed to Oaktree) was settled in exchange for equity of the reorganized business, and Molycorp was liquidated.

The newly reorganized Neo business comprised essentially the original business of NEM (as it existed prior to the completion of the Molycorp Acquisition), with the addition of Molycorp’s Silmet facility located in Sillamäe, Estonia.

photo credit: Neo Performance Materials