Refractory holding company RHI Magnesita it plans to acquire Resco Group, a U.S.-based producer of alumina monolithics and other basic and non-basic refractories, for up to $430 million. The buyer’s chief executive officer said the purchase will be “a step-change for our U.S. business and our North American production footprint.”
The seller is Balmoral Funds, a private-equity group. The acquisition is expected to be completed in H2 2024, pending subject to regulatory approval and customary closing conditions.
Resco produces shaped and unshaped refractories at seven plants and two raw-materials locations in the U.S., plus one in Canada and another in the U.K. Its products are used in manufacturing aluminum and steel, petrochemicals, and cement.
RHI Magnesita is headquartered in Vienna, Austria, and manufactures over 120,000 different refractory varieties for iron and steel and nonferrous metal production, as well as cement-making, glassmaking, and other industries.
The buyer said the purchase will increase its regional production by transferring significant volumes of production from non-US plants to the Resco production plants in the U.S. It emphasized that, “based on customer feedback, we are taking steps to improve supply chain security, reduce production lead times, and stabilize working capital.”
“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,” stated CEO Stefan Borgas.
“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 steelmaking are complementary to those of RHI Magnesita.”