REG - RHI Magnesita N.V. - Completion of Resco transaction

RHI Magnesita NVAnnouncement

28/01/2025 14:00

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RNS Number : 9980U  RHI Magnesita N.V.  28 January 2025

28 January 2025

RHI Magnesita N.V.

("RHI Magnesita" or "the Group")

 

Completion of Resco transaction

 

RHI Magnesita announces the completion of its $410 million (c.€390 million)
acquisition of Resco Group, a US based producer of alumina monolithics and
wide range of basic and non-basic refractories, following merger control
authority approval.

About Resco

Resco is a producer of shaped and unshaped refractories, including products
for use in the petrochemical, cement, aluminium, and steel making industries.
The Group will acquire six refractory 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.

Benefits of the Acquisition

The Acquisition will deliver a broad range of benefits to customers, including
a significantly enhanced product portfolio, supply security, improved
responsiveness and sustainability benefits.

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, and continues the Group's strategic
growth trajectory in alumina-based refractories.

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
incur one-time costs of €60 million, including restructuring efforts in
non-US plants. A write down of assets in Brazil of approximately €30 million
connected to the completion of the Resco transaction is expected to be
recognised in the 31 December 2024 results, reflecting the network
optimisation which will result in transfer of production capacity into the US.

Synergies are expected to be generated through supply chain improvements,
production network optimisation, working capital reduction, logistics
efficiencies, supply integration, technology transfer, increased recycling
opportunities and procurement savings.

 

Commenting on the Acquisition, Stefan Borgas, Chief Executive Officer of RHI
Magnesita, said:

"The acquisition of Resco marks a significant milestone for RHI Magnesita as
we continue to expand our offering in North America, responding to our
customers' evolving priorities. This deal will deliver a step change for our
North American business as we continue to enhance local-for-local production
and expand our product offering. Resco is a profitable and cash flow
generative business with a strong customer base in the petrochemical, cement,
and aluminium industries that will immediately add value to RHI Magnesita.

Our new colleagues from Resco will join a collaborative international team and
benefit from a wide range of skills, experience, and exceptional career
development opportunities. Together, I am confident that we will continue to
set new industry standards."

 

For further enquiries, please contact:

Chris Bucknall, Head of Investor Relations

Tel +43 699 1870 6490

E‐mail: chris.bucknall@rhimagnesita.com
(mailto:chris.bucknall@rhimagnesita.com)

 

Media:

Hudson Sandler

Mark Garraway, Emily Dillon, Nick Moore

Tel +44 020 7796 4133

E-mail: rhimagnesita@hudsonsandler.com (mailto:rhimagnesita@hudsonsandler.com)

 

About RHI Magnesita

RHI Magnesita is the leading global supplier of high-grade refractory
products, systems and solutions which are critical for high-temperature
processes exceeding 1,200°C in a wide range of industries, including steel,
cement, non-ferrous metals and glass. With a vertically integrated value
chain, from raw materials to refractory products and full performance-based
solutions, RHI Magnesita serves customers around the world, with over 20,000
employees in 67 main production sites (including raw material sites), 12
recycling facilities and more than 70 sales offices. RHI Magnesita intends to
leverage its leadership in terms of revenue, scale, product portfolio and
diversified geographic presence to target strategically those countries and
regions benefiting from more dynamic economic growth prospects.

The Group is listed within the Equity Shares (Commercial Companies) category
("ESCC") of the Official List of the London Stock Exchange (symbol: RHIM) and
is a constituent of the FTSE 250 index, with a secondary listing on the Vienna
Stock Exchange (Wiener Börse). For more information please visit:
www.rhimagnesita.com (http://www.rhimagnesita.com)

 

Definitions

 "the Acquisition"         The Acquisition of Resco Group by RHI Magnesita, first announced on 2 April
                           2024 and completed on 28 January 2025.
 "Resco Group" or "Resco"  A group of companies carrying out the manufacturing and sale of refractory
                           products in the US, UK and Canada.

 

 

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