Greater Noida (Business Desk): RHI Magnesita has announced the completion of the acquisition of the US-based Resco Group, from an affiliate of Balmoral Funds LLC, a Los Angeles-based private equity firm, and management. The acquisition, for an enterprise value of $410 million (c.€390 million), is the most significant investment by the Group since the merger of RHI and Magnesita in 2017.
A milestone acquisition in North America
The deal marks a major milestone for RHI Magnesita as it focuses on delivering an exceptional customer experience in the important North American region. RHIM’s refractory products are essential to the production processes for cement, steel, aluminium, and many other industrial producers in the region. The addition of Resco Group to the Company’s North American operations will significantly increase local-for-local production, improving supply chain security for critical industries that underpin the economy of the continent.
Elevating customer experience through an enlarged offering
The acquisition will deliver a broad range of benefits to customers, including:
- A significantly enhanced product portfolio: offering a wider range of basic and non-basic products, with applications across multiple industries. The addition of Resco Group will support RHI Magnesita’s strategic growth trajectory in alumina-based refractories.
- Supply security: an increased focus on local-for-local production will result in a reduced reliance on international imports for US customers.
- Improved responsiveness: the combination of RHI Magnesita’s global manufacturing capabilities and an improved local-for-local production footprint will drive logistical efficiencies and enhanced supply chain agility for shorter lead times.
- Sustainability advancements: Resco customers will benefit from RHI Magnesita’s industry leadership in innovation and sustainability as well as circular economy solutions, to support broader industrial decarbonization efforts. RHI Magnesita’s advanced recycling initiatives in particular will play a key role in reducing waste by converting used refractory materials into reusable raw materials.
- Industry expertise: supported by RHI Magnesita’s global leading expertise, Resco Group and RHIM will continue to pioneer new industry standards for the North American region.
Over the coming weeks and months, RHI Magnesita will focus on integrating teams, processes, technology, and resources to ensure a seamless transition and maintain business continuity for the combined entity’s suppliers, customers and other stakeholders. As part of the integration of the networks, RHI Magnesita will also invest into Resco’s plants to further upgrade them, increase capacities, introduce new product lines and improve overall productivity.
Stefan Borgas, CEO of RHI Magnesita, said, “The acquisition of Resco marks a significant milestone for RHI Magnesita as we continue to expand our offering in North America, responding to our customers’ evolving priorities while setting the highest industry standards. This deal will deliver a step change for our North American business as we continue to enhance local-for-local production and expand our product offering. Resco is a profitable and cash flow generative business with a strong customer base in the North American petrochemical, cement, and aluminium industries that will immediately add value to RHI Magnesita. I would like to extend a warm welcome to our new colleagues from Resco. A business is nothing without its people, and the excellent reputation of Resco and its strong performance to date are testament to the hard work of these expert and dedicated professionals. They will join a collaborative international team, working alongside colleagues across the globe to benefit from a diversity of skills, experience, and exceptional career development opportunities at RHI Magnesita. Together, I am confident that we will continue to set new industry standards.”
Mark Essig, CEO of Resco from 2022 until the sale, said “This transaction marks an exciting new chapter for Resco and our employees. Over our 78-year history, we have built a strong reputation for delivering high-quality refractory products and technical solutions to our customers. Joining RHI Magnesita will allow us to further enhance our capabilities and expand our reach while maintaining our commitment to excellence in customer service. We are grateful for Balmoral Funds’ support during their ownership, which helped strengthen our market position, and we look forward to continuing our growth trajectory as part of RHI Magnesita’s global platform.”
