The Austrian-Brazilian group RHI wants to take over Resco for up to $430 million. RHI wants to strengthen local production in the USA.
The Austrian-Brazilian refractory group RHI Magnesita today announced its intention to acquire the US group Resco Group, manufacturer of alumina monoliths and refractory materials, for an enterprise value of up to $430 million. Resco operates seven plants and two raw material sites in the United States and two operations in the United Kingdom and Canada.
The US group is currently owned by Balmoral Funds, a California-based private equity RIA with assets under management of $1.5 billion, the RHI said in a statement on Easter Monday. In 2023, Resco recorded unaudited sales of $252 million, pre-tax profits of $20 million and gross assets of $191 million.
Production in the USA
Regarding the reason for the takeover, RHI said that currently around 50 percent of US sales are not produced in the country. The acquisition will increase local production by moving significant production volumes from plants outside the US to Resco’s US manufacturing facilities.
The purchase naturally also affects the balance sheet. “In the medium term, synergies will arise from restructuring the shared supply chain, which is expected to take approximately two years and incur one-off costs of €60 million, including restructuring efforts at plants outside the US,” listed RHI said.
RHI CEO Stefan Borgas said of the takeover: “The acquisition advances our ‘local for local’ production strategy and will shorten supply chains, improve our response speed and increase our customers’ security of supply with refractory materials.” (APA)
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