Natural Resource Partners L.P. (NRP) said Tuesday that it has agreed to acquire VantaCore Partners L.P., a privately-held limited partnership specializing in the construction materials industry, for $205 million.
The company noted that the acquisition of VantaCore Partners will enhance its platform for growth in the construction aggregates business, especially through VantaCore's operations that supply limestone and base material to oil and gas companies in the Marcellus and Utica shale plays.
NRP is a master limited partnership based in Houston, Texas, with its operations headquarters in Huntington, West Virginia. The company is principally engaged in the business of owning and managing mineral reserve properties.
Philadelphia, Pennsylvania-based VantaCore was formed in 2006 to acquire profitable, well-managed and competitively advantaged mid-sized aggregates companies.
VantaCore, one of the top 25 aggregates producers in the U.S., operates three hard rock quarries, six sand and gravel plants, two asphalt plants and a marine terminal. Its current operations are located in Pennsylvania, West Virginia, Tennessee, Kentucky and Louisiana.
VantaCore is currently owned by a consortium of institutional investors. The consortium includes Trilantic Capital Partners as majority owner, in addition to Kayne Anderson Energy Development Company, Hartz Alternative Investments, LLC, Corridor Private Holdings, Inc., and members of the company's management team.
NRP noted that VantaCore will be operated as its wholly-owned subsidiary, and will continue to be managed by VantaCore's Chief Executive Officer Colin Oerton, and Chief Operating Officer Perry Donahoo. NRP expects VantaCore to generate about $25 million in EBITDA over the next twelve months.
NRP expects the acquisition to close in the fourth quarter, and to be immediately accretive to both its earnings and cash flow. The company noted that the acquisition price of $205 million is subject to customary purchase price adjustments.
Wyatt Hogan, Executive Vice President of NRP said, "Upon completion of the acquisition, NRP will have invested over $550 million since January 2013 in non-coal related businesses and, as we demonstrated with our second quarter results, those acquisitions are contributing significant additional cash flows to NRP."
As consideration for the acquisition, NRP plans to issue about $36 million in NRP common units to certain of the sellers, including Kayne Anderson and Hartz Alternative Investments, and to fund the remainder through cash and borrowings under NRP (Operating) LLC's revolving credit facility.
NRP is trading at $16.01, up $0.03 or 0.19 percent on a volume of 72,460 shares.
by RTT Staff Writer
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