Austria’s RHI Magnesita to buy US-based alumina producer Resco

RHI Magnesita, a Vienna-based manufacturer of fireproof materials, intends to acquire Resco Group, a US-based company specializing in alumina and refractories, for an enterprise value of up to $430 million, as announced by both companies. This acquisition, according to RHI Magnesita, aligns with their strategy of localized production, enhancing their range of products for US customers while streamlining supply chains and improving responsiveness. The cash consideration for the acquisition is anticipated to be approximately $324 million, with a potential upper limit of about $342 million if the completion extends beyond 18 months post-signing. The funding for this acquisition will come from RHI Magnesita’s existing liquidity and a new committed facility of 200 million euros ($216 million). Resco reported unaudited revenues of $252 million in 2023 with a profit before tax of $20 million. Following the acquisition, synergies will be realized through the restructuring of the combined supply chain, a process expected to take about two years with one-time costs estimated at 60 million euros, including restructuring activities at non-US plants. The acquisition is contingent upon customary closing conditions, including approval from merger control authorities, and is projected to be finalized in the latter half of this year. Once completed, the combined entity will encompass 15 production sites spanning the United States, Canada, and Mexico. Resco Group, currently owned by Balmoral Funds, a California-based private equity firm managing approximately $1.5 billion in assets, issued a statement confirming these details.