(Reuters) - British speciality chemicals company Elementis (ELM.L) has struck a deal to buy Mondo Minerals for $100 million (76.8 million pounds) less than initially agreed following criticism of the original price from its shareholders.

Elementis said on Tuesday it had agreed with seller U.S. private equity firm Advent to pay $500 million for Mondo Minerals, down from $600 million previously.

Elementis said in June it was buying Amsterdam-based Mondo to expand into talc additives used in a range of products from plastics to cosmetics.

ADVERTISEMENT

Chief Executive Office Paul Waterman said Elementis had agreed the revised deal after consulting with its shareholders.

"The feedback that they had from shareholders was that the business makes a lot of sense, strategically seems good, but they had some concerns raised about the price that Elementis was paying," a source familiar with the matter told Reuters.

"A number of concerns were raised, but it was largely over the price," the source added.

Mondo, which owns talc mines in central Finland, makes industrial talc additives used to strengthen plastics, provide corrosion resistance to coatings, an oxygen barrier to food packaging and UV protection to cosmetics.

Elementis, for its part, owns a mine in California that produces hectorite, a soft clay used in personal care and beauty products such as face creams, using a mine-to-market model similar to Mondo's.

Elementis said the revised deal had received strong support from its top shareholders including Threadneedle Asset Management and APG Asset Management and written confirmation of support from two more of its top five investors.

ADVERTISEMENT

It expects the deal to add to adjusted earnings per share in the first full year of ownership.

Elementis also said the acquisition would be funded by a rights issue of about $230 million and from debt facilities. It had previously flagged a rights issue of $280 million.

Shares in Elementis, which have fallen 12.3 percent this year, were down 3.9 percent at 243 pence at 0814 GMT.

The deal to buy Mondo comes after a $360 million acquisition last year by Elementis of U.S.-based SummitReheis to expand its personal care chemicals business.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and Mark Potter)