J&J talc supplier sells assets to Magris Resources to emerge from Chapter 11
It was just last April, that Judge Wolfson ruled in a Daubert hearing that select experts would be allowed to testify in a multidistrict litigation case, identified as number 2738 and called the Johnson & Johnson Talcum Powder products Marketing, Sales Practices and Products Liability Litigation. That ruling, as Cosmetics Design Editor Deanna Utroske reported, also gave the green light to some 16,000 talc cases against J&J.
Readers of Cosmetics Design will know that Imerys Talc supplied J&J with talc for use in its baby powder products and was at times implicated in legal cases considering the beauty maker’s liability in ovarian cancer and related deaths among women who used the products for feminine hygiene.
J&J talc supplier filed for chapter 11 bankruptcy early last year
Also in April 2019, the 3 Imerys subsidiary companies operating in North America—Imerys Talc Americas, Imerys Talc Vermont, Inc., and Imerys Talc Canada—filed for bankruptcy. As FinancierWorldwide.com explained at the time, “The companies have filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware after evaluating a range of strategies to safeguard their long-term business interests and address their historic talc-related liabilities in the US.”
Giorgio La Motta, President of those 3 businesses told the press at the time of the bankruptcy \ filing, “This is an important, meaningful, strategic step for our business. After carefully evaluating all possible options, we determined that pursuing Chapter 11 protection is the best course of action to address our historic talc-related liabilities and position the filing companies for continued growth.”
He took care to reiterate the company’s stance on the safety of talc and then explained that “it is simply not in the best interests of our stakeholders to litigate these claims in perpetuity and incur millions of dollars in projected legal costs to defend these cases.”
And he noted that “by deciding to file for Chapter 11 protection, we have laid the groundwork to efficiently resolve our historic talc-related liabilities and focus on our continued success in the industry.” The company along with their legal advisors at Latham & Watkins LLP and management consultants at Alvarez & Marsal projected emerging from Chapter 11 in the first half of this year, but that target came and went during the pandemic.
A next step for Imerys and their North American subsidiary talc companies
This week, Imerys got the go-ahead to sell the assets of its North America talc businesses to Toronto, Ontario – based Magris Resources.
And in the company’s media release announcing as much, La Motta described the deal as “a major milestone in the North American Talc Subsidiaries' path towards emergence from Chapter 11.”
“We believe the outcome of this sale process maximizes value of the assets to the benefit of all parties,” he says, adding, “We look forward to working with Magris as we move towards closing, and remain committed to providing our customers with safe, high quality mineral products moving forward. Our leadership team would also like to extend our gratitude to Imerys Talc America's employees for their hard work and focus throughout this process.”
As for the acquiring company (founded by Aaron Regent in 2012), Magris owns mining operations on 6 continents and has offices in not only Canada, but also Chile and Peru, and will pay $223 million for the Imerys Talc assets, according to shearman.com.
Chairman and CEO of Magris, Aaron Regent, tells the press, “We are excited to acquire the North American Talc Subsidiaries, which are underpinned by high-quality, long-life assets that produce a variety of talc products for blue-chip customers in diverse industrial end markets. We have been extremely impressed by the quality and safety culture of the operations and workforce, and look forward to partnering with the existing management team to continue to grow this business.”
And Matthew Fenton, President and CFO at Magris, also sees the acquisition as an opportunity to further grow the company’s business in this region: “We look forward to welcoming the North American Talc Subsidiaries to the Magris family.”
“The combination of the North American Talc Subsidiaries and our existing niobium [Nb and no 41 on the periodic table of elements] business in Canada,” he says, “represents a unique opportunity to realize meaningful synergies and create an industrial minerals platform that Magris can continue to invest in and scale.”