Resco Products, a portfolio company of Balmoral Funds, has agreed to be acquired by RHI Magnesita at an enterprise value of $430 million. Balmoral acquired Resco in March 2022 from Wellspring Capital Management.
Resco Products is a make of refractory products including bricks, monolithics, pre-cast shapes, cartops, clays and minerals that are used in the steel, aluminum, paper, power, cement, and other industrial end markets.
Refractory products are used in high-temperature industrial processes – greater than 1200 °C – to contain materials while they’re burned, melted, blasted, fired, fused, and shaped; and to protect equipment such as furnaces and kilns against thermal, mechanical and chemical stress.
Pittsburgh-headquartered Resco was founded in 1946 as Refractory Specialties Co. and today, led by CEO Mark Essig, operates 11 facilities across North America and the United Kingdom.
Vienna, Austria-headquartered RHI Magnesita (LSE: RHIM) is a supplier of high-grade refractory products and systems that are used in high-temperature processes in a range of industries, including steel, cement, non-ferrous metals and glass.
RHIM manufactures more than 120,000 products that include bricks and lining mixes to flow control products such as slide gates, nozzles and plugs. RHIM products, which can have service lives from a few cycles within a day to as long as 10 years, are made from base materials including magnesite and dolomite.
According to RHIM, which was founded in 1834, the company is a leader in the refractories sector with more than 16,000 employees at 47 production sites, 8 recycling facilities and more than 70 sales offices.
“We are grateful to Mark Essig, Chairman of the Board Dr. Kevin Handerhan and the entire Resco team for their terrific partnership over the past two years,” said Robin Nourmand, a managing director at Balmoral. “Working together, we significantly improved Resco’s operations, ultimately transforming the business and realizing a successful outcome for this investment.”
Los Angeles-headquartered Balmoral invests in corporate carve-outs, restructurings and other special situations. The firm targets equity investments of $20 to $125 million in companies with $30 million to $400 million in revenues.
Jefferies is the financial advisor to Resco on this transaction which is expected to close in the second half of 2024.
© 2024 Private Equity Professional | April 4, 2024
