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What: Shares of Cabot Microelectronics (Nasdaq: CCMP) have skyrocketed today, up by as much as 26% before cooling off a bit, and currently up a healthy 16% as of this writing, after the company announced a new capital management initiative to return value to shareholders.

So what: The company will be paying a special dividend of $15 per share to shareholders during the first calendar quarter of 2012, costing roughly $345 million total. It has also increased its authorized share repurchase program to $150 million, up from the previous available authorization of $83 million. Cabot plans on funding the special dividend with cash on hand and an anticipated new term loan facility, split evenly between the two sources.

Now what: Cabot CEO William Noglows said the company will continue to focus on its long-term growth strategy and balance investment opportunities with its desire to distribute capital to shareholders. Prior to making the decision, the company's board considered its cash balance, current credit market conditions, and Cabot's ability to service the debt and fund future operations, and the implications of using leverage. Using debt to distribute cash to shareholders is a little odd, but if leverage is what the board wants, leverage is what it will get.

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