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RENO (MINEWEB) - Canadian uranium über miner Cameco has signed an agreementwith private equity firm Advent International to purchase forUS$136 million and the assumption of US$164 million in debt, theNukem Energy Group, one of the world's largest traders of nuclearfuel products and services. The agreement announced Monday includes provisions that would giveAdvent a share of Nukem's future earnings under certain conditionsuntil the end of 2014. The transaction is expected to close in thefourth quarter of 2012. Based in Germany and the United States, Nukem acts as a marketintermediary between uranium producers and nuclear electricutilities in North and South America, Europe and the Far East. Nukem's primary business is the purchase and sale of uraniumconcentrates, uranium hexafluoride, and enriched uranium productfor the production of fuel for nuclear power plants. Along withCameco and Areva, Nukem is also a party to a long-term arrangementwith the Russian company TENEX for the sale of uranium hexafluorideindirectly derived from dismantled Russian warheads (HEU commercialagreement). Nukem sells uranium in the spot market, as well as long-termcontracts, and has purchase and sale agreements until 2022. Salesvolumes have ranged from 10 million to 15 million pounds of uraniumannually. "This acquisition complements Cameco's business by strengtheningour position in nuclear fuel markets and improving our access tounconventional and secondary sources of supply," said Cameco CEOTim Gitzel. In 2012 and 2013, Nukem is expected to add cash flow to Cameco "duelargely to favorable margins from its HEU material," Cameco said.The acquisition is expected to have a positive impact on earnings,starting in 2013, according to Gitzel. The company has extensive experience in Russia and the formerSoviet republics of Central Asia which have emerged as key playersin the nuclear fuel industry. TENEX has a client relationship withNukem for assistance with the marketing of enrichment services(both spot and longer term) to utility companies in the U.S. andelsewhere. Nukem's assets include uncommitted inventory and purchase and salescontracts including 4.5 million pounds of uranium that is availableto Nukem under the HEU commercial agreement through 2013. Key personnel have agreed to remain with Nukem. Jeff Faul, Nukempresident, said "we are confident that our business with grow withthe inherent financial and technical strength of a leading energycompany." After the transaction close, Nukem will continue to operate as anindependent company. SUBSCRIBE to Mineweb.com's free daily newsletter now. The e-commerce company in China offers quality products such as China Bottle Labeling Machine , Robotic Palletizing System, and more. For more , please visit Robotic Palletizing System today!
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