A mine shaft at the Cameco McArthur River uranium mine site in northern Saskatchewan in this 2007 photo. Cameco has announced it is purchasing German nuclear fuel company Nukem for $136-million (U.S.)STRINGER/CANADA/Reuters
Canadian uranium producer Cameco Inc. has signed a deal to buy Nukem Energy, a German company that trades nuclear fuel products and services, for roughly $136-million (U.S.) in cash plus debt.
The Saskatoon-based company said Monday the deal strengthens its position and improves access to unconventional and secondary sources of supply.
Under the agreement, Cameco will pay Advent International and other Nukem shareholders $136 million and assume $164 million in net debt.
However, the company said Nukem is expected to significantly reduce the balance of the debt before the deal closes.
The agreement also includes provisions that will see Advent receive a share of Nukem's future earnings if the company reaches certain performance targets until the end of 2014.
Nukem, which will continue to operate as an independent company after the acquisition, sold about 12 million pounds of uranium in 2011 and is expected to sell 10 million to 15 million pounds this year.
The company's assets include uncommitted inventory and a portfolio of purchase and sales contracts. Cameco said key staff at Nukem have also committed to remain with the company.
Cameco said the deal is expected to add to cash flow starting this year and have a positive impact on earnings starting in 2013.
Shares in Cameco were down 48 cents at $21.11 on the Toronto Stock Exchange on Monday.