US Olin agrees to acquire privately-held KA Steel for $328m

18 July 2012 12:37  [Source: ICIS news]

LONDON (ICIS)--US-based chlor-alkali producer Olin announced on Wednesday it has signed a definitive agreement to acquire privately-held KA Steel Chemicals for $328m (€266m) in cash.

The deal, which is expected to be complete by the end of the third quarter, was made on a cash-free, debt-free basis, the company added.

Olin said it expects to finance the acquisition using a combination of cash on hand and existing borrowing facilities.

KA Steel, headquartered in Lemont, Illinois, is major distributor of caustic soda in North America, and a leading bleach manufacturer in the US midwest, Olin said.

Olin’s chairman, president and CEO, Joseph Rupp, said: "[KA Steel's] business, which is concentrated in the upper midwest, provides an excellent complement to the geographic profile of Olin's chlor-alkali business.

“The acquisition of KA Steel increases Olin's capacity to manufacture bleach by approximately 20%, and provides a platform to increase the sales of other Olin produced, value-added products such as hydrochloric acid and potassium hydroxide.”

According to Olin, KA Steel generated 2011 revenues of $435m and adjusted earnings, before interest, tax, depreciation and amortisation of $31m. The company said it expects the transaction to be immediately accretive to both earnings and cash flow.

($1 = €0.81)


By: Franco Capaldo
+44 (0)20 8652 3214



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