Orica has entered into a agreement to acquire 100 per cent of Cyanco from an affiliate of Cerberus for $978 million on a cash-free, debt-free enterprise value basis.
The Acquisition of Cyanco, a US-based leader in the manufacture and distribution of sodium cyanide primarily serving the gold mining industries in the US, Canada, Mexico, Latin America, and Africa, is expected to complement Orica’s established Mining Chemicals business and create an integrated global manufacturing and distribution network.
In line with Orica’s strategy for growth beyond blasting, Orica will establish a Mining Chemicals business vertical and create an integrated global sodium cyanide manufacturing and distribution network
The Acquisition will be largely funded from Orica’s existing cash and undrawn committed debt facilities, alongside a A$400 million underwritten institutional placement
The transaction More than doubles Orica’s existing sodium cyanide production capacity to approximately 240kTpa.
Orica managing director and chief executive officer Sanjeev Gandhi said “Cyanco is a highly complementary business, and by combining it with our established sodium cyanide business, Orica will create a leading integrated global sodium cyanide producer with world-class supply capabilities in mining. The Acquisition will more than double Orica’s existing sodium cyanide production capacity and provide us with the ability to cater to the highly attractive US and Canadian gold mining industries.”
Cyanco is a leading manufacturer and distributor of sodium cyanide, a specialised chemical required for gold processing.
The Acquisition will be largely funded from Orica’s existing cash and undrawn committed debt facilities, alongside a A$400 million underwritten institutional placement.
Orica will additionally undertake a non-underwritten share purchase plan capped at A$65 million to enable retail investor participation.
Orica will retain a prudent balance sheet post the Acquisition and Placement, with gearing expected to be at the lower end of Orica’s target range of 30 to 40 per cent.
The Acquisition is expected to be completed by the end of FY2024, subject to the expiration of certain regulatory waiting periods and other customary closing conditions.