North American Coal acquires Reed Companies for $62.5 million

Deal Participants:
Acquiring Company: North American Coal View Profile Charts Homepage
Target Company: Reed Companies View Profile Charts Homepage
Deal Financials:
Price: $62.5 million
Announced: Aug 31, 2012


North American Coal, a wholly owned subsidiary of NACCO Industries Inc. (NC), announced that it acquired, through a wholly owned subsidiary, four related companies - Reed Minerals Inc., Reed Hauling Inc., C&H Mining Company, Inc. and Reed Management, L.L.C. - from members of and entities controlled by the Reed family. These companies, which will be known as Reed Minerals, are based in Jasper, Alabama and are involved in the mining of bituminous coal.

The acquisition was completed for a preliminary purchase price of about $62.5 million, less certain amounts specified in the purchase agreement to complete the transaction on a "cash-free, debt-free" basis. The acquisition was funded using borrowings under North American Coal's existing credit facility.

The terms of the transaction also include an earn-out contingent on the average coal selling price received on the first 15 million tons of coal sold by North American Coal from the Reed Minerals operations. The earn-out payments will be paid quarterly and, if payable, will commence in the third quarter of 2012.

For the year ended December 31, 2011, the Reed Minerals companies sold 0.9 million tons of coal and had revenue of approximately $86.0 million and net income of approximately $4.0 million. North American Coal expects the acquisition to be accretive to earnings immediately.

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Edit History:
Aug 31 '12
This version submitted by Melg8Mike