8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)         May 1, 2015

KMG Chemicals, Inc.

(Exact name of registrant as specified in its charter)

TEXAS	001-35577	75-2640529
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
9555 W. Sam Houston Parkway S., Suite 600, Houston, Texas		77099
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 713-600-3800

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

On May 1, 2015, KMG Chemicals, Inc. (the “Company”) completed the acquisition of Valves Incorporated of Texas (“Val-Tex”), a privately held Texas corporation, pursuant to the terms of a previously announced Agreement and Plan of Merger (the “Merger Agreement”). Val-Tex manufactures and distributes industrial sealants and lubricants, primarily to the oil and gas storage, pipeline and gas distribution markets, as well as related products, such as lubrication equipment and fittings. In addition to the lubricants business, Val-Tex also owned 606,875 shares of the Company’s common stock. Fred C. Leonard III was the majority shareholder, president and chief executive officer of Val-Tex. He is also a director of the Company.

The merger consideration paid to the former shareholders of Val-Tex was 606,875 shares of common stock of the Company plus $23.7 million in cash. The 606,875 shares of the Company previously owned by Val‑Tex were cancelled as of the time of the merger, and no additional net shares of the Company are outstanding as a result of the merger. The cash portion of the purchase price included payment of approximately $236,000 for the value of inventory at closing that exceeded $1.5 million. The merger consideration was determined based on arms-length negotiation among the parties to the Merger Agreement and was based on the estimated fair value of the assets, liabilities and business involved. The Company also assumed liabilities of approximately $0.5 million. The Company completed the acquisition by borrowing on its revolving loan under its existing credit facility with Wells Fargo Bank, National Association, Bank of America, N.A., HSBC Bank USA, National Association and JPMorgan Chase Bank, N.A.

A copy of the press release announcing the completion of the acquisition is attached as Exhibit 99.1 to this Current Report on Form 8‑K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits
99.1	Press Release, dated May 1, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

KMG Chemicals, Inc.
By:	/s/ Malinda G. Passmore	Date: May 1, 2015
	Malinda G. Passmore,
	Vice President and Chief Financial Officer

EX-99.1

    Exhibit 99.1 KMG Chemicals, Inc. 9555 W. Sam Houston Parkway South Suite 600 Houston, TX  77099 USA  

KMG Completes Acquisition of Val-Tex

HOUSTON, Texas — (BUSINESS WIRE) — May 1, 2015 — KMG Chemicals, Inc. (NYSE: KMG), a global provider of specialty chemicals in select markets, today announced that it has completed the acquisition of privately held Valves Incorporated of Texas (Val-Tex), a manufacturer of industrial valve lubricants and sealants. In addition to the lubricants business, KMG acquired the 606,875 shares of KMG common stock owned by Val-Tex.

The purchase price for Val-Tex was $23.7 million in cash, plus 606,875 shares of common stock of KMG. With the closing of the acquisition, the 606,875 shares of KMG previously owned by Val-Tex were cancelled, and no additional net shares were issued. The cash portion of the purchase price included a payment of approximately $200,000 for the value of inventory at closing that exceeded $1.5 million. KMG also assumed liabilities of approximately $0.5 million. KMG financed the cash portion of the transaction by drawing on its existing revolving credit facility.

“We are delighted to announce the completion of this important acquisition. Val-Tex provides an exciting new strategic growth opportunity for KMG in the established, yet highly fragmented, market for industrial lubricants,” said Chris Fraser, KMG chairman and chief executive officer. “We look forward to supporting Val-Tex’s continued successful growth and over time we intend to utilize our global infrastructure and distribution capabilities to expand Val-Tex’s participation in international markets. We continue to expect the addition of Val-Tex will be accretive to KMG’s fourth fiscal quarter adjusted EBITDA and adjusted diluted earnings per share.”

Located in Houston, Texas, Val-Tex manufactures and distributes high quality, cost-effective industrial sealants and lubricants, as well as related products, such as lubrication equipment and fittings. The company primarily serves the oil and gas storage, pipeline and gas distribution markets with value-added specialty products that enable optimal valve operation and help prevent costly, unscheduled downtime at customer facilities and pipelines. In addition, Val-Tex’s products provide important safety benefits along with preventing fugitive valve emissions.

About KMG

KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to select markets. The Company grows by acquiring and optimizing stable chemical product lines and businesses with established production processes. For more information, visit http://kmgchemicals.com.

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, the impact of competitive services and pricing and general economic risks and uncertainties.

Contact

KMG Chemicals, Inc.

Eric Glover, 713-600-3865

Investor Relations Manager

Phone: 713-600-3800 ● Fax: 713-600-3850

www.kmgchemicals.com ● NYSE: KMG