TIDMRHIM
RNS Number : 1118X
RHI Magnesita N.V.
21 April 2023
21 April 2023
RHI Magnesita N.V.
("RHI Magnesita" or "the Group")
Acquisition of Seven Refractories
RHI Magnesita announces the acquisition of the Europe, India and
US operations of Seven Refractories for cash consideration of
approximately EUR93 million.
Seven Refractories
Seven Refractories is a specialist supplier of non-basic
monolithic refractory mixes with broad applications across all of
the Group's customer segments including iron and steel, cement,
aluminium and non-ferrous metals. Seven Refractories has customer
relationships in 45 countries and a strong track record of
innovation, including the development of a range of environmentally
sustainable products and flexible manufacturing technologies. Seven
Refractories employs around 240 staff at its production sites in
Slovenia, India and the US and at its sales offices and service
centres in Cyprus, Germany, Italy and the United Kingdom.
Non-basic refractory mixes are expected to become increasingly
important with the development of new low CO(2) emitting
manufacturing technologies within the Group's key customer
industries. Products offered by Seven Refractories range from low
temperature fireclay to ultra-high temperature zircon mixes,
high-grade alumina mixes and sustainable taphole clay with a low
CO(2) footprint.
Benefits of the Acquisition
The Acquisition will enable RHI Magnesita to offer a broader
range of non-basic refractory mixes and is expected to be highly
complementary to the Group's existing non-basic portfolio.
Attractive potential synergies are targeted through cross selling
opportunities, logistics improvements, increased recycling usage,
procurement efficiencies and low capital intensity brownfield
expansion projects . The senior management of Seven Refractories,
including Chief Executive Officer Erik Zobec, will join the RHI
Magnesita Group to drive initiatives focused on non-basic
monolithics following completion of the Acquisition.
Acquisition details
The businesses to be purchased in the Acquisition recorded
revenues of EUR105 million and Profit Before Tax of EUR11.4 million
in the year to 31 December 2022 and had Gross Assets of EUR86.7
million at 31 December 2022. The shareholders of the parent company
of Seven Refractories, Seven Refractories GmbH, are Hephaistos
International B.V. (48.5%), a Dutch investment company focused on
founder-led and operated businesses, PE Holding GmbH (14.8%),
Vaalon Capital No 3 L.P. (6.5%) and the senior management of Seven
Refractories (30.2%).
The India based business of Seven Refractories consists of a 49%
stake in RHI Magnesita Seven Refractories Limited, formerly Dalmia
Seven Refractories Limited. RHI Magnesita already owns 51% of RHI
Magnesita Seven Refractories Limited following its acquisition of
Dalmia OCL Limited in January 2023 and will own 100% of this
business following completion of the Acquisition.
The Acquisition is subject to standard closing conditions and is
expected to complete in the second half of 2023. The Acquisition
will be funded from RHI Magnesita's existing committed and undrawn
facilities and cash.
Commenting on the Acquisition, Stefan Borgas, Chief Executive
Officer of RHI Magnesita, said:
"This transaction represents a significant step forward for RHI
Magnesita in non-basic refractory mixes, which is additive to our
existing presence in this market and highly complementary to our
overall customer offering. We see compelling opportunities to
realise synergies through the integration of Seven Refractories
into our existing network and there is a strong alignment in
seeking to offer our customers more sustainable products with a low
carbon footprint. I am pleased to welcome this entrepreneurial team
to our Group. RHI Magnesita's network will enable them to continue
to build the business even more successfully on a truly global
basis. Together we will continue to execute our strategy to grow
through consolidation."
Erik Zobec, Chief Executive Officer of Seven Refractories,
said:
"The Seven Refractories team is delighted to be joining the RHI
Magnesita Group at this exciting stage in its development as the
global leader in refractories. Our specialist presence in the
non-basic monolithics market will be supported and driven forwards
through this combination. We will continue to serve our customers
with the innovative products, technology leadership and proven
flexibility they have come to expect from us, whilst the additional
capabilities and global presence of RHI Magnesita will deliver a
step change in the breadth of products and services that we can
offer to them."
For further enquiries, please contact:
Chris Bucknall, Head of Investor Relations
Tel +43 699 1870 6490
E--mail: chris.bucknall@rhimagnesita.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 1,200degC 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 around 13,500
employees in 33 main production sites 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
benefitting from more dynamic economic growth prospects.
The Group maintains a premium listing on 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 prime segment
of the Vienna Stock Exchange (Wiener Börse). For more information
please visit: www.rhimagnesita.com
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (596/2014/EU).
Definitions
"Acquisition" The acquisition by RHI Magnesita of
Europe, India and US based refractory
businesses of Seven Refractories in
exchange for cash consideration of EUR93
million. The entities to be transferred
to RHI Magnesita are Seven Refractories
d.o.o. (100% stake), including certain
subsidiaries of Seven Refractories d.o.o.
based in Europe and the US; Seven Refractories
Deutschland GmbH (75.5% stake with call
option over minority stake); and the
49% stake in RHI Magnesita Seven Refractories
Limited (formerly Dalmia Seven Refractories
Limited) that is not already owned by
RHI Magnesita following the acquisition
of Dalmia OCL Limited on 5 January 2023.
"Profit Before Tax" Profit before tax attributable to the
businesses and assets that are the subject
of the Acquisition, including a 49%
share of the profit before tax generated
by RHI Magnesita Seven Refractories
Limited, in which the Group already
holds a 51% controlling stake. Earnings
from RHI Magnesita Seven Refractories
Limited are fully consolidated into
the Group's financial statements following
the acquisition of Dalmia OCL Limited
on 5 January 2023.
"RHI Magnesita" or "the RHI Magnesita N.V. and its subsidiary
Company" or "the Group" companies
"Seven Refractories" A group of companies currently owned
and controlled by Seven Refractories
GmbH carrying out refractory business
under the trading name of Seven Refractories.
"US" United States of America
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