Acquisition will strengthen customer solutions in North America, with increased local-for-local production and RHIM’s global leading innovation and expertise
RHI Magnesita is pleased to announce the completion of the acquisition of the US-based Resco Group, from an affiliate of Balmoral Funds LLC, a Los Angeles-based private equity firm, and management. The acquisition, for an enterprise value of $410 million (c.€390 million), is the most significant investment by the Group since the merger of RHI and Magnesita in 2017.
The deal marks a major milestone for RHI Magnesita as it focuses on delivering an exceptional customer experience in the important North American region. RHIM’s refractory products are essential to the production processes for cement, steel, aluminium, and many other industrial producers in the region. The addition of Resco Group to the Company’s North American operations will significantly increase local-for-local production, improving supply chain security for critical industries that underpin the economy of the continent.
The acquisition will deliver a broad range of benefits to customers, including:
Over the coming weeks and months, RHI Magnesita will focus on integrating teams, processes, technology, and resources to ensure a seamless transition and maintain business continuity for the combined entity’s suppliers, customers and other stakeholders. As part of the integration of the networks, RHI Magnesita will also invest into Resco’s plants to further upgrade them, increase capacities, introduce new product lines and improve overall productivity.
Stefan Borgas, CEO of RHI Magnesita, commented:
“The acquisition of Resco marks a significant milestone for RHI Magnesita as we continue to expand our offering in North America, responding to our customers’ evolving priorities while setting the highest industry standards. This deal will deliver a step change for our North American business as we continue to enhance local-for-local production and expand our product offering. Resco is a profitable and cash flow generative business with a strong customer base in the North American petrochemical, cement, and aluminium industries that will immediately add value to RHI Magnesita.
I would like to extend a warm welcome to our new colleagues from Resco. A business is nothing without its people, and the excellent reputation of Resco and its strong performance to date are testament to the hard work of these expert and dedicated professionals. They will join a collaborative international team, working alongside colleagues across the globe to benefit from a diversity of skills, experience, and exceptional career development opportunities at RHI Magnesita. Together, I am confident that we will continue to set new industry standards.”
Mark Essig, CEO of Resco from 2022 until the sale, commented:
“This transaction marks an exciting new chapter for Resco and our employees. Over our 78-year history, we have built a strong reputation for delivering high-quality refractory products and technical solutions to our customers. Joining RHI Magnesita will allow us to further enhance our capabilities and expand our reach while maintaining our commitment to excellence in customer service. We are grateful for Balmoral Funds’ support during their ownership, which helped strengthen our market position, and we look forward to continuing our growth trajectory as part of RHI Magnesita’s global platform.”
Media:
Abhijit Borah, Head of Corporate Communications & Public Affairs
Tel +43 699 1870 6728
E-mail: Abhijit.Borah@RHIMagnesita.com
Hudson Sandler
Tel +44 020 7796 4133
E-mail: rhimagnesita@hudsonsandler.com
About RHI Magnesita
RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with over 20,000 employees in 67 main production sites (including raw material sites), 12 recycling facilities and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefiting from more dynamic economic growth prospects.
The Group is listed within the Equity Shares (Commercial Companies) category (“ESCC”) of the Official List of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com
About Resco
Resco is a producer of shaped and unshaped refractories, including products for use in the petrochemical, cement, aluminium, and steel-making industries. Resco operates seven plants and two raw material sites in the US and two plants in the UK and Canada. Resco’s Rescobond and Rescocast brands are widely used in refining and petrochemical applications by global customers.
Resco recorded unaudited revenues of $252 million in the year to 31 December 2023, with Profit before Tax of $20 million and had Gross Assets of $191 million at 31 December 2023.
About Balmoral Funds
Balmoral is a Los Angeles, CA based private equity fund that was founded in 2005. Balmoral’s objective is to be the financial partner of choice for entrepreneurial and successful C-suite executives and operating advisors creating transformative outcomes in the businesses they co-invest in together. Balmoral has approximately $1.3 billion of assets under management. Balmoral typically invests in companies that have revenues between $30 to $500 million and require equity investments of $10 to $120 million, with the capability of doing more in particularly compelling opportunities.