Cotec's MagIron closes Reynolds pellet plant buy

Executive Summary

• Cotec Holdings Corp. confirms that its portfolio company, MagIron LLC, has completed the acquisition of the Reynolds pellet plant in Indiana from the receivership estate of Altos Hornos De Mexico SAB De CV.
• Cotec holds a 16.5% equity stake in MagIron on a fully diluted basis and supports MagIron's strategy to become a fully integrated direct reduced iron (DR) pellet producer for the U.S. electric arc furnace steel industry.
• The acquired asset is a modern, straight grate, past-producing pelletizer that is restart-ready, benefiting from approximately $440 million of prior investment.

Key Details

• Transaction Completion: MagIron LLC completed the acquisition of the pellet plant located near Reynolds, Indiana, on schedule and in accordance with the asset purchase agreement.
• Seller: The asset was acquired from the receivership estate of Altos Hornos De Mexico SAB De CV.
• Cotec Ownership: Cotec Holdings Corp. owns 16.5% of the equity in MagIron on a fully diluted basis.
• Asset Specifications: The Reynolds pellet plant is described as a modern straight grate, past-producing, restart-ready pelletizer.
• Prior Investment: The asset benefits from approximately $440 million of prior investment.
• Strategic Direction: MagIron intends to implement a restart strategy to become a fully integrated DR pellet producer serving America's fast-growing electric arc furnace steel industry.
• Future Plans: MagIron is also pursuing the development of merchant pig iron facilities.
• Management Commentary: CEO Larry Lehtinen highlighted the milestone and the focus on bringing investment and job creation to Minnesota and Indiana. CEO Julian Treger emphasized Cotec's support for the strategy and the potential for MagIron to become a significant contributor to the U.S. steel industry.

Notable Quotes

• Larry Lehtinen, CEO of MagIron: "The completion of this transaction marks a significant milestone for MagIron. We now look forward to implementing our restart strategy and bringing significant investment and job creation to both Minnesota and Indiana."
• Julian Treger, CEO of Cotec: "The Reynolds pellet plant is a modern straight grate, past-producing, restart-ready pelletizer benefiting from approximately $440-million of prior investment. The completion of its acquisition enables MagIron to now focus on the execution of its strategy to become a fully integrated DR pellet producer to America's fast-growing electric arc furnace steel industry and pursuing the development of merchant pig iron facilities. Cotec is very supportive of this strategy and believes that, if successful, MagIron could become a significant contributor to the USA steel industry."