Olin Corporation to acquire KA Steel Chemicals
US-based Olin Corporation has entered into an agreement to purchase KA Steel Chemicals, on a cash free, debt free basis, for $328m.
Olin is likely to fund the acquisition using a combination of cash in hand and existing borrowing options.
The company is also planning to issue new senior notes to meet a certain portion of the purchase price.
Joseph Rupp, Olin chairman, president and CEO, said KA Steel 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,'' Rupp added.
''Olin also expects to realize annualized synergies of approximately $35m over the next three years.
''The closing of the acquisition is conditioned upon regulatory approval and other customary closing conditions and is expected to occur by the end of the third quarter."
Privately-held KA Steel manufactures bleach in the Midwest and distributes caustic soda throughout North America.