Rain Calcining arm to buy out CII Carbon for $595 mn

Rain/CII Holdings Inc, a subsidiary of Hyderabad-based Rain Calcining, announced that it has entered into an agreement to acquire all the outstanding equity of the US-based CII Carbon LLC for a cash price of $595 million. Rain anticipates the transaction to be consummated this month.

CII is the second largest global producer of calcined petroleum coke (CPC), a raw material used in the production of aluminum and titanium dioxide, producing approximately 1.84 million tonnes (mt) of CPC annually. CII has production facilities in Illinois, Louisiana, Mississippi and West Virginia.

Rain Calcining operates two kilns in the port city of Visakhapatnam and is the largest CPC producer in Asia. The combined companies will constitute the world's largest producer of CPC, with over 2.4 million tonnes per annum of CPC production and annual sales of $550 million, Rain stated in a press release on Saturday.

"This acquisition is a major step in Rain's long-term strategy to become a global calcining company, through both organic growth and strategic acquisitions. The combination of Rain and CII will create a company with assets strategically located worldwide to efficiently supply the industries we serve. We anticipate continuing with our organic growth strategy by adding two new kilns in India, which will provide approximately 4.8 lakh tonnes of additional capacity," Gerard M Sweeney, president of Rain/CII Holdings Inc, said.

Sweeney is expected to become the CEO of the combined company, with responsibility for oversight of the company's daily activities and its pursuit of the anticipated synergies of the combination.

The company said that Rain Commodities (USA) Inc, a wholly owned subsidiary of Rain Commodities, expects to invest $92 million in convertible non-voting preferred stock in Rain/CII Holdings in connection with the financing of the aforesaid acquisition. The acquisition is being arranged by Citi and ICICI.