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.
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)
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