James River Coal Company to Acquire International Resource Partners LP and Logan & Kanawha Coal Company, LLC
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o All Cash Transaction for $475 million
o Substantial Increase in the Production and Shipment of Metallurgical Coal
o Substantial Increase in Shipments to Global Seaborne Coal Markets
o Logan & Kanawha Coal Company, LLC, a Wholly Owned Subsidiary of IRP, is a Coal Marketing and Trading Company with Direct Long-Term Customer Relationships Around the World
o Consolidated 2010 Revenue of $490.3 million and Pro-Forma EBITDA of $84.8 million
o Conference Call Slides Posted to the Company Website
RICHMOND, Va., March 6, 2011 - James River Coal Company (Nasdaq: JRCC), a producer of steam and industrial-grade coal, today announced that it has signed a definitive agreement to purchase International Resource Partners LP (IRP) and Logan & Kanawha Coal Company, LLC (L&K) and their affiliated companies for $475 million in an all-cash transaction.
Peter T. Socha, Chairman and Chief Executive Officer of JRCC, commented: "This is a transformative transaction for James River Coal Company. It fills several strategic areas in our corporate portfolio. It increases our offerings of metallurgical coal. It provides us with greater access to the international seaborne coal markets. It provides us with one of the most respected coal brokering and trading operations in the United States. Lastly, it brings us a deeper bench of management and technical expertise. We are also very pleased that Gary White, CEO of IRP, and Joe Czul, CEO of L&K, and their entire management teams will become part of our combined organization. We look forward to welcoming all of the employees and families of IRP and L&K to James River Coal Company."
Under the terms of the agreement JRCC will pay $475 million in cash. JRCC will acquire IRP/L&K free of debt. JRCC has secured $375 million in committed financing from Deutsche Bank and UBS Investment Bank, which in addition to existing cash balances, is expected to be sufficient to finance the cash consideration to IRP owners. JRCC will consider long-term financing options between signing and closing in place of the committed financing.
The Purchase Agreement contains customary representations, warranties, covenants and conditions, as well as indemnification provisions subject to specified limitation. The closing of the acquisition is subject to the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, certain third party consents and other customary closing conditions. The acquisition is expected to close in the first half of 2011.
ADVISORS
Deutsche Bank is acting as financial advisor and Kilpatrick Townsend & Stockton LLP is acting as legal advisor to JRCC in connection with the transaction. UBS Investment Bank is acting as financial advisor and Jackson Kelly PLLC is acting as legal advisor to IRP in connection with the transaction. Vinson & Elkins LLP is acting as legal advisor to IRP's general partner, Lightfoot Capital Partners, LP.
ABOUT JAMES RIVER
James River Coal Company mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The Company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana.
ABOUT IRP AND LOGAN & KANAWHA
International Resource Partners LP is a privately held partnership headquartered in Charleston, West Virginia. The Company is currently controlled by its general partner, a wholly owned subsidiary of Lightfoot Capital Partners, LP. IRP's limited partners include Lightfoot Capital Partners, Kayne Anderson Energy Development Company, Tortoise Capital Resources Corporation, and International Industries, Inc., which is owned by the Chairman of IRP, James H. "Buck" Harless. IRP operates a total of 9 underground and surface coal mines in southern West Virginia and eastern Kentucky. The company's mines produced a total of 1.9 million tons in 2010. These tons included 1.2 million tons of metallurgical coal and 0.7 million tons of thermal coal. Total 2010 shipments, including coal purchased by L&K for blending purposes, were 3.7 million tons. These tons included 2.6 million tons of metallurgical coal and 1.1 million tons of thermal coal. The company has total reserves and resources of approximately 136 million tons. These tons include approximately 61 million tons of metallurgical coal reserves/resources and 75 million tons of thermal coal reserves/resources. The consolidated company generated 2010 revenues of approximately $490 million and pro-forma EBITDA of $84.8 million.
CONFERENCE CALL, WEBCAST AND REPLAY: The Company will hold a conference call with management on March 7, 2011 at 9:00 a.m. Eastern Time. The conference call can be accessed by dialing 877-340-2553, or through the James River Coal Company website at www.jamesrivercoal.com. International callers, please dial 678-224-7860. A replay of the conference call will be available on the Company's website and also by telephone, at 800-642-1687 for domestic callers. International callers, please dial 706-645-9291: pass code 49584534.
SOURCE James River Coal Company
CONTACT: Elizabeth M. Cook, Director of Investor Relations, James River Coal Company, +1-804-780-3000
Web Site: www.jamesrivercoal.com
