James River Coal Co. of Richmond has reached an agreement to buy International Resource Partners LP (IRP) and Logan & Kanawha Coal Co. LLC (L&K) for $475 million in cash.
The deal will allow Richmond-based James River Coal to increase production of metallurgical coal, which is used in steel production, and provide greater access to foreign coal markets.
The management teams of IRP and L&K will remain with the organizations. IRP is based in Charleston, W.Va., and produced 1.9 million tons of coal in 2010 at its nine coal mines in southern West Virginia and eastern Kentucky. About 1.2 million tons of that was metallurgical coal. L&K is a sales and marketing subsidiary of IRP.
James River Coal has secured $375 million in financing from Deutsche Bank and UBS Investment Bank for the transaction.
The acquisition, which is subject to regulatory approvals and conditions, is expected to close in the first half of 2011.
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