- Shares of chemicals company Elementis fell Tuesday, after it said it would launch a rights issues to finance the acquisition of Mondo Minerals at a reduced value of $500m following an agreement on revised terms.

The company said it would acquire Mondo Minerals for $500m, lower than the $600m it had agreed in June after terms of the originally agreement were revised.

Under the revised deal, Elementis would also pay up to $53.0m in earn-out payments should Mondo Minerals meet certain performance criteria over a three financial year period ending on 31 December 2020.

If the performance targets are achieved in full, the terms of the revised agreement would value Mondo at $553m on a cash free, debt free basis, Elementis said.

The acquisition is expected to be accretive to adjusted earnings a share in the first full year following completion.

Elementis said it would finance the acquisition through a combination of the proceeds of a 1-for-4 rights issue raising total gross proceeds of $230m and through a $775.0m term and revolving credit facilities agreement.

The rights issue would be made on the basis of 1 share at 152.0p a new share for every 4 existing ordinary shares.

The Elementis directors confirmed that they would unanimously recommend that shareholders vote in favour of the acquisition, which is expected to be completed on 23 October.

Elementis shareholder are expected to vote on the acquisition on 3 October 2018.

'Mondo Minerals is a high quality business with significant opportunities for future growth,' said Paul Waterman, CEO of Elementis.

'Following engagement with our shareholders, we have agreed terms of a revised deal with Advent that we believe represents compelling value.'

'We remain excited by Mondo’s prospects and the significant opportunities we believe this acquisition will unlock for Elementis.'

At 9:38am: [LON:ELM] Elementis PLC share price was -7.1p at 245.7p Story provided by