NEW YORK, Aug. 21, 2018 /PRNewswire/ -- WeissLaw LLP is investigating possible breaches of fiduciary duty and other violations of law by the Board of Directors of KMG Chemicals, Inc. ("KMG" or the "Company") (NYSE: KMG) in connection with the proposed acquisition of the Company by Cabot Microelectronics Corporation ("CCMP) (NASDAQ: CCMP). Under the terms of the acquisition agreement, KMG shareholders will be entitled to receive $55.65 in cash and 0.20 of a CCMP share for each KMG share they own, representing consideration of $77.45 based on CCMP's Aug. 20 opening price.
WeissLaw is investigating whether KMG's Board acted to maximize shareholder value prior to entering into the agreement. Notably, the per-share consideration is nearly $2.00 less than the Company's June 12 trading price of $79.35, and $7.55 less than the analyst's target price of $85.00.
Additionally, KMG recently announced positive financial results for the third quarter of fiscal year 2018. It reported sales of $118.6 million, reflecting an impressive growth of 45% year-over-year. The Company also announced double digit growth in GAAP earnings per-share and GAAP net income, with record increases in adjusted EBITDA and operating cash flow.
Finally, the acquisition of KMG is a strategic transaction that will propel CCMP into leadership position in the industry. According to CCMP's President and CEO, "KMG's . . . performance materials business broadens our product offerings into the fast-growing industry for pipeline performance products and services."
Given these facts, WeissLaw is investigating whether KMG's Board acted in the best interests of KMG's public shareholders to maximize shareholder value prior to entering into the agreement. If you own KMG shares and would like more information about your rights or our investigation, or if you have information to share with us, please contact Joshua Rubin by telephone at (888) 593-4771 or by email at [email protected].
WeissLaw LLP has litigated hundreds of stockholder class and derivative actions for violations of corporate and fiduciary duties. We have recovered over a billion dollars for defrauded clients and obtained important corporate governance relief in many of these cases. If you have information or would like legal advice concerning possible corporate wrongdoing (including insider trading, waste of corporate assets, accounting fraud, or materially misleading information), consumer fraud (including false advertising, defective products, or other deceptive business practices), or anti-trust violations, please email us at [email protected] or fill out the form on our website, http://www.weisslawllp.com/kmg-chemicals-inc/
SOURCE WeissLaw LLP