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Cymat Technologies Up 40% as It Confirms The Acquisition of Rio Tinto Alcan's MMC Business, Clients

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Cymat Technologies (CYM.V) jumped 40% after it confirmed that it will acquire Rio Tinto Alcan's aluminum metal matrix composites business (MMC), the company said on Tuesday.

The agreement, which also involves a transfer of Rio Tinto's commercial customers, was first announced in June last year. Financial details were not disclosed.

MMC is a ceramic particle-infused aluminum manufactured by Rio Tinto Alcan and used in the automotive and rail industries for light-weight components requiring extreme wear-resistance. It is exiting the business due to a strategic reorganization.

Cymat, which already uses MMC as a primary input material to produce stabilized aluminum foam (SAF), will establish MMC production capability within its existing Mississauga, Ontario, plant. The company believes it could realize incremental annual revenue of between C$7.5 million to C$10 million.

"While this agreement with Rio Tinto has taken much longer than expected to come to fruition, we are finally able to act on this unique opportunity to leverage our existing facilities and unique skill sets and, in turn, realize a major expansion of our business," said Cymat chief executive Michael Liik.

"Combined with our current sales growth in the nuclear, military and particularly architectural verticals in our SAF business, this new initiative will accelerate our path to profitability."

Cymat shares were last seen up C$0.04 to C$0.14 on the TSX Venture Exchange.

Price: $0.14, Change: $+0.04, Percent Change: +40.00%

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