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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: October 18, 2000
KMG CHEMICALS, INC.
(Formerly KMG-B, Inc.)
(Name of Registrant as specified in its charter)
Commission File Number 000-29278
TEXAS 75-2640529
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
10611 HARWIN DRIVE, SUITE 402
HOUSTON, TEXAS 77036
(Address of principal executive offices)
(713) 988-9252
(Registrant's telephone number)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
A subsidiary of the Company acquired an herbicides product line from GB
Biosciences Corporation ("GBB"), a subsidiary of Zeneca Ag Products, Inc., on
October 3, 2000 for $2.3 million plus the payment of an earnout on adjusted net
sales of the herbicides over five years. The acquisition was financed out of
Company working capital. The purchased product line consists of monosodium and
disodium methanearsonic acid herbicides ("MSMA products"). The Company believes
that its sales of MSMA products in fiscal 2001 will be approximately $5-7
million.
The Company's acquisition of the MSMA product line included the
purchase of pesticide registrations, product trademarks and the manufacturing
equipment necessary to make MSMA products. For the balance of calendar 2000, GBB
will continue to manufacture MSMA products for the Company in order to build the
inventory that will be needed by customers in the 2001 growing season. The
Company intends to begin moving the purchased manufacturing equipment to its
facility in Matamoros, Mexico in January 2000, to reassemble it and restart
production late in calendar 2001.
MSMA products are sold primarily under the name Bueno(R) 6 and used
in the United States and elsewhere in the world as a cotton crop herbicide.
For several years, however, cotton farmers in the United States have been
planting genetically modified cotton seed that is resistant to the herbicide
Roundup-Registered Trademark- and other glyphosate herbicides. As farmers
converted to that seed and to glyphosate, MSMA products became niche products
used primarily by farmers who are sensitive to the higher cost of the
genetically modified seed program.
MSMA products are also sold by Drexel Chemical Company,
Luxembourg-Pamol, Inc. and Albaugh, Inc.
ITEM 5. OTHER EVENTS.
See Item 2, above.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
2.1(iii) Asset Sale Agreement dated October 3, 2000 between
KMB-Bernuth, Inc., the Company and GB Biosciences Corporation
10.23 Manufacturing and Formulation Agreement dated October 3, 2000
between KMB-Bernuth, Inc. and GB Biosciences Corporation
Portions of Exhibits 2.1(iii) and 10.23 are omitted and
separately filed with the Securities Exchange Commission
pursuant to a request for confidential treatment
Schedules and attachments that are omitted shall be furnished
to the Commission on request
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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/ David L. Hatcher Date: October 18, 2000
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David L. Hatcher
President
