Australian explosives manufacturer Orica Ltd. reported that it has agreed to buy Texas-based sodium cyanide producer Cyanco Intermediate 4 Corp. from an affiliate of Cerberus Capital Management for $640 million on a cash-free, debt-free enterprise value basis.
Orica said the acquisition will be funded from the company’s existing cash and undrawn committed debt facilities, alongside a A$400 million (approximately $262 million at current exchange rates) underwritten institutional placement.
Cyanco is a leading manufacturer and distributor of sodium cyanide primarily serving the gold mining industries in the US, Canada, Mexico, Latin America, and Africa with two manufacturing plants in Nevada and Texas. The acquisition will more than double Orica’s existing sodium cyanide production capacity to approximately 240,000 mt/y.
Orica said the acquisition will significantly increase its footprint in “the very attractive North American gold mining industry and strategically located to access cost-competitive US natural gas-based manufacturing assets.”
The transaction is expected to be completed by the end of FY2024, which ends Sept. 30, 2024, subject to the expiration of certain regulatory waiting periods and other customary closing conditions.