By RTT News,
January 17, 2014, 07:01:00 AM EDT
(RTTNews.com) - MFC Industrial Ltd. ( MIL ) announced that it has reached an agreement to acquire a 100% interest in the FESIL AS Group, a vertically integrated supply-chain management company with a production facility in Norway, sales companies in Germany, Luxembourg, Spain, United States, India and China, and an interest in several quartz deposits in Spain.
However, MFC said it will not acquire FESIL's Mo Industripark AS shares.
The purchase price of about 500 million Norwegian Krone or about US$82 million is based on the net tangible equity asset value as of September 30, 2013, and will be adjusted to reflect the fair value of certain assets and the profit and loss over the period to final closing, the company said.
In addition to the purchase price, MFC noted that it will pay a royalty based on tiered ferrosilicon production at the Mo i Rana facility for two years, expected to equal approximately 2.9% of ferrosilicon revenue per annum at full production.
The transaction is currently scheduled to complete in the first quarter of 2014 and is subject to customary conditions, including, without limitation, the approval of the competition authorities of Germany, Austria and Ukraine.
Headquartered in Trondheim, Norway, FESIL is a producer of ferrosilicon, an essential alloy in the production of steel, stainless steel, and cast iron.
FESIL's melting plant is located in Mo i Rana, and produces a range of ferrosilicon products including granulated and refined qualities (high and semi-high purity), which makes up the bulk of its production. Annual capacity of the plant's two furnaces is approximately 80,000 MT of ferrosilicon and 23,000 MT of microsilica.
FESIL reported net revenues in 2012 of approximately 3.3 billion Norwegian Krone or approximately US$565 million with its Production Segment representing just over 25% of net revenue.
Michael Smith, Chairman of MFC, said, "The complimentary addition of FESIL to the MFC Group adheres to our financial discipline and is not expected to have a material effect on our financial ratios or cause any dilution to our shareholders' equity.
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