James River Coal to acquire International Resource Partners and Logan & Kanawha for $475MM

Source: James River Coal Company

James River Coal Company (Nasdaq:JRCC), signed a definitive agreement to purchase International Resource Partners LP (IRP) and Logan & Kanawha Coal Company, LLC (L&K) and their affiliated companies for $475 million in an all-cash transaction. 

Peter T. Socha, Chairman and Chief Executive Officer of JRCC, commented: "This is a transformative transaction for James River Coal Company. It fills several strategic areas in our corporate portfolio. It increases our offerings of metallurgical coal. It provides us with greater access to the international seaborne coal markets. It provides us with one of the most respected coal brokering and trading operations in the United States. Lastly, it brings us a deeper bench of management and technical expertise. We are also very pleased that Gary White, CEO of IRP, and Joe Czul, CEO of L&K, and their entire management teams will become part of our combined organization. We look forward to welcoming all of the employees and families of IRP and L&K to James River Coal Company." 

Under the terms of the agreement JRCC will pay $475 million in cash. JRCC will acquire IRP/L&K free of debt. JRCC has secured $375 million in committed financing from Deutsche Bank and UBS Investment Bank, which in addition to existing cash balances, is expected to be sufficient to finance the cash consideration to IRP owners. JRCC will consider long-term financing options between signing and closing in place of the committed financing. 

The Purchase Agreement contains customary representations, warranties, covenants and conditions, as well as indemnification provisions subject to specified limitation. The closing of the acquisition is subject to the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, certain third party consents and other customary closing conditions. The acquisition is expected to close in the first half of 2011.



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