Acquisition du groupe Resco
RHI Magnesita NV
("RHI Magnesita" ou "le Groupe")
Acquisition du groupe Resco
RHI Magnesita announces its intention to acquire Resco Group, a US based producer of alumina monolithics and wide range of basic and non-basic refractories, for an enterprise value of up to $430 million.
About Resco
Resco is a producer of shaped and unshaped refractories, including products for use in the petrochemical, cement, aluminium, and steel making industries. Resco operates seven plants and two raw material sites in the US and two plants in the UK and Canada. Resco's Rescobond and Rescocast brands are widely used in refining and petrochemical applications by global customers.
Resco is currently owned by Balmoral Funds, a $1.5 billion assets under management California-based private equity RIA focusing on investments in industrials, business services, aerospace and logistics businesses with complex operations and/or ownership dynamics, such as corporate divestitures.
Resco recorded unaudited revenues of $252 million in the year to 31 December 2023, with Profit before Tax of $20 million and had Gross Assets of $191 million at 31 December 2023.
Logic of the Acquisition
Currently approximately 50% of RHI Magnesita's US sales are not produced in the country. The Acquisition will increase RHI Magnesita's local production in the US and Canada by transferring significant volumes of production from non-US plants to the Resco production facilities in the US. Based on customer feedback, we are taking steps to improve supply chain security, reduce production lead times and stabilise working capital. This acquisition continues the Group's strategic growth trajectory in alumina-based refractories by providing US customers with an improved product offering.
Synergies will be created in the mid-term following the restructuring of the combined supply chain, which is expected to last approximately two years and will create one time costs of €60 million, including restructuring efforts in non-US plants. Synergies expected to be generated à travers la quantité chain improvements, production network optimisation, working capital reduction, logistique efficiencies, supply integration, technology transfer, increased recycling opportunities and procurement savings.
Timing and financial impact
The acquisition is subject to customary closing conditions including merger control authority approval and is expected to be completed in H2 2024. In connection with the Acquisition, RHI Magnesita has agreed to pay a deposit of $18 million, offsetable against the consideration payable, which shall be non-refundable in the event the deal does not complete. In addition, the Group has agreed to make certain ticker payments, related to the achievement of certain triggering events or completion conditions. The first of these is a monthly payment of $2 million, running to a maximum of 18 months from signing, which will, to the extent payable, increase the consideration for the Acquisition on a dollar-for-dollar basis. There is another payment of $12 million which is payable upon signing, but offsetable against the consideration payable at completion and fully refundable in the event the deal does not complete, unless certain conditions are met.
Following completion, Group gearing measured as a ratio of Net Debt to EBITDA is expected to increase by approximately 0.3x to 2.6x on a pro forma 2024 EBITDA basis (2023: 2.3x). This is consistent with previous guidance on leverage for M&A. The cash consideration for the Acquisition is expected to be approximately $324 million (with an upper cap of approximately $342 million if completion extends 18 months beyond signing) and will be funded by RHI Magnesita's existing liquidity, together with a new committed facility of €200 million. The Group had available liquidity of €1.3 billion at the 2023 year end and will continue to maintain a significant liquidity reserve going forwards.
Commentant l'acquisition, Stefan Borgas, directeur général de RHI Magnesita, a déclaré :
"I am pleased to report that the acquisition of Resco represents a step-change for our US business and our North American production footprint. The acquisition advances our 'local for local' production strategy and will shorten supply chains, improve our speed of reaction and increase the security of supply of refractories for our customers. We are listening to our customers and responding to their desires. Resco's main strengths are in the petrochemical, cement and aluminium industries, where RHI Magnesita has had very little business thus far, and its activities in steel making are complementary to those of RHI Magnesita. Resco operates seven refractory plants and two raw material sites, with two plants also located in the UK and Canada.
Resco has an excellent reputation with its customers and is a profitable and cash flow generative business which will make an important financial contribution to our Group. We have been nothing but impressed with the professional people that we have met throughout the entire Resco and Balmoral organisations, especially in operations and we are keen to welcome Resco into the RHI Magnesita Group and provide global career opportunities. I am confident that the combined team will set new industry standards."
A&O served as RHI Magnesita's legal advisor.
Conférence téléphonique
A conference call for analysts will be held on Tuesday 2 April 2024 at 09:00 UK time (10:00 CET). The call can be accessed using the following link:
https://www.netroadshow.com/events/login?show=63d2e2a7&confId=62970
Une rediffusion sera disponible sur le même lien peu après l'événement.
Pour plus d'informations, veuillez contacter:
Chris Bucknall, responsable des relations avec les investisseurs
Tel + 43 699 1870 6490
E-mail: [email protected]
Médias:
Hudson Sandler
Mark Garraway, Emily Dillon, Nick Moore
Tel + 44 020 7796 4133
Courriel : [email protected]
À propos de RHI Magnesita
RHI Magnesita est l'un des principaux fournisseurs mondiaux de produits, systèmes et solutions réfractaires de haute qualité, essentiels aux processus à haute température dépassant 1,200 16,000 °C dans un large éventail d'industries, notamment l'acier, le ciment, les métaux non ferreux et le verre. Avec une chaîne de valeur verticalement intégrée, des matières premières aux produits réfractaires et des solutions entièrement basées sur la performance, RHI Magnesita sert des clients dans le monde entier, avec environ 47 8 employés répartis dans 70 sites de production, XNUMX installations de recyclage et plus de XNUMX bureaux de vente. RHI Magnesita a l'intention de s'appuyer sur son leadership en termes de chiffre d'affaires, d'échelle, de portefeuille de produits et de présence géographique diversifiée pour se développer davantage sur les marchés à forte croissance.
Le Groupe maintient une cotation premium sur la liste officielle de la Bourse de Londres (symbole : RHIM) et fait partie de l'indice FTSE 250, avec une cotation secondaire à la Bourse de Vienne (Wiener Börse). Pour plus d'informations, s'il vous plaît visitez: www.rhimagnésita.com
Définitions
"the Acquisition" | The Acquisition of Resco Group by RHI Magnesita for an enterprise value of up to $430 million. |
"M&A" | Fusions et acquisitions. |
"Resco Group" or "Resco" | A group of companies carrying out the manufacturing and sale of refractory products in the US, UK and Canada. The holding company of Resco Group is Balmoral Refractories Holdings, Inc. |
"RHI Magnesita" or "the Group" | RHI Magnesita N.V., including its subsidiary companies, as appropriate. |
"ROYAUME-UNI" | United Kingdom of Great Britain and Northern Ireland. |
"NOUS" | Etats-Unis d'Amérique. |
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