Rain CII to buy Belgium firm Rutgers for $915 million

Rain CII Carbon LLC, a wholly-owned, step-down subsidiary of Hyderabad-based cement make Rain Commodities Limited, is acquiring 100% stake in Rutgers NV, a Belgium-headquartered coal tar pitch manufacturer, for a gross enterprise value of approximately Rs 4,914 crore or $915 million.

Rain CII has executed a share purchase agreement with Triton Partners, a North European private equity fund that currently owns Rutgers, for the 100% stake acquisition. The transaction is expected to close in the first quarter of 2013.

Rutgers was sold by Germany’s specialty chemicals major Evonik Industries in 2007 to Triton Partners. The company has achieved gross revenues of euro 831 million (or $1,082 million) for the financial year ended December 2011.

In a filing to the BSE, Rain CII said that the company was planning to fund the transaction through a combination of internal cash accruals, and issue proceeds of euro 533 million of long-term bonds.

Citigroup Global Markets is the financial advisor to the deal while Skadden, Arps, Slate, Meagher & Flom LLP are legal advisors.

Rain Commodities is the world’s largest manufacturer of calcined petroleum coke (CPC) through the operation of nine coke calcining plants in the US, India and China.

The company, which is in the process of setting up its fifth water-heat recovery plant in Louisiana in the US, also operates two integrated cement plants in Andhra Pradesh and one fly ash handling and cement packing facility in Karnataka.

“The acquisition of Rutgers is complimentary to Rain’s core business of CPC. Expanding into tar distillation business constitutes both product and geographical diversification to Rain Group and provides vertical depth within its core business,” the company said in a statement.

Rain Commodities Limited’s scrip is currently trading at Rs 42 on the BSE, down 2.78%, over the previous close of Rs 43.20 a share.