RHI Magnesita N.V.: acquisition of Seven Refractories

Jul 27, 2023

Save to read list Published by David Bizley, Editor World Cement, Tuesday, 02 May 2023 12:26

RHI Magnesita announces the acquisition of the Europe, India and US operations of Seven Refractories for cash consideration of approximately €93 million.

Seven Refractories is a specialist supplier of non-basic monolithic refractory mixes with broad applications across all of the Group’s customer segments including iron and steel, cement, aluminium and non-ferrous metals. Seven Refractories has customer relationships in 45 countries and a strong track record of innovation, including the development of a range of environmentally sustainable products and flexible manufacturing technologies. Seven Refractories employs around 240 staff at its production sites in Slovenia, India and the US and at its sales offices and service centres in Cyprus, Germany, Italy and the United Kingdom.

Non-basic refractory mixes are expected to become increasingly important with the development of new low CO2 emitting manufacturing technologies within the Group’s key customer industries. Products offered by Seven Refractories range from low temperature fireclay to ultra-high temperature zircon mixes, high-grade alumina mixes and sustainable taphole clay with a low CO2 footprint.

The Acquisition will enable RHI Magnesita to offer a broader range of non-basic refractory mixes and is expected to be highly complementary to the Group’s existing non-basic portfolio. Attractive potential synergies are targeted through cross selling opportunities, logistics improvements, increased recycling usage, procurement efficiencies and low capital intensity brownfield expansion projects. The senior management of Seven Refractories, including Chief Executive Officer Erik Zobec, will join the RHI Magnesita Group to drive initiatives focused on non-basic monolithics following completion of the Acquisition.

The businesses to be purchased in the Acquisition recorded revenues of €105 million and Profit Before Tax of €11.4 million in the year to 31 December 2022 and had Gross Assets of €86.7 million at 31 December 2022. The shareholders of the parent company of Seven Refractories, Seven Refractories GmbH, are Hephaistos International B.V. (48.5%), a Dutch investment company focused on founder-led and operated businesses, PE Holding GmbH (14.8%), Vaalon Capital No 3 L.P. (6.5%) and the senior management of Seven Refractories (30.2%).

The India based business of Seven Refractories consists of a 49% stake in RHI Magnesita Seven Refractories Limited, formerly Dalmia Seven Refractories Limited. RHI Magnesita already owns 51% of RHI Magnesita Seven Refractories Limited following its acquisition of Dalmia OCL Limited in January 2023 and will own 100% of this business following completion of the Acquisition.

The Acquisition is subject to standard closing conditions and is expected to complete in the second half of 2023. The Acquisition will be funded from RHI Magnesita’s existing committed and undrawn facilities and cash.

Commenting on the Acquisition, Stefan Borgas, Chief Executive Officer of RHI Magnesita, said:

“This transaction represents a significant step forward for RHI Magnesita in non-basic refractory mixes, which is additive to our existing presence in this market and highly complementary to our overall customer offering. We see compelling opportunities to realise synergies through the integration of Seven Refractories into our existing network and there is a strong alignment in seeking to offer our customers more sustainable products with a low carbon footprint. I am pleased to welcome this entrepreneurial team to our Group. RHI Magnesita’s network will enable them to continue to build the business even more successfully on a truly global basis. Together we will continue to execute our strategy to grow through consolidation.”

Erik Zobec, Chief Executive Officer of Seven Refractories, said:

“The Seven Refractories team is delighted to be joining the RHI Magnesita Group at this exciting stage in its development as the global leader in refractories. Our specialist presence in the non-basic monolithics market will be supported and driven forwards through this combination. We will continue to serve our customers with the innovative products, technology leadership and proven flexibility they have come to expect from us, whilst the additional capabilities and global presence of RHI Magnesita will deliver a step change in the breadth of products and services that we can offer to them.”

Read the article online at: https://www.worldcement.com/asia-pacific-rim/02052023/rhi-magnesita-nv-acquisition-of-seven-refractories/

The Rohrdorfer Group wants to produce CO2-neutral cement by 2038.

Embed article link: (copy the HTML code below):