PT Delta Dunia Makmur (IDX:DOID), through PT Bukit Makmur Internasional subsidiary American Anthracite SPV I, has entered into a stock purchase agreement to acquire of Atlantic Carbon Group.
The US$122.4 million ($185.7 million) transaction is expected to complete in June 2024.
It will be funded via the group’s cash position and a syndicated financing facility with PT Bank BNI and PT Bank Mandiri.
Atlantic Carbon Group is touted as the second largest UHG anthracite producer in the US, based on its Q1 2024 anthracite production profile.
Indonesia Stock Exchange-listed Delta Dunia says the deal secures ownership of four producing Ultra High Grade Anthracite (UHG) mines in Pennsylvania, US.
Following close of the acquisition, the group expects to become a key UHG anthracite producer globally.
ACG’s operations are expected to add US$120 million to US$130 million of revenue per year.
Delta Dunia says the transaction further diversifies its business geographically and into future-facing commodities, in line with its transformation strategy.
The transaction is “financially attractive due to its favourable valuation, leverage, and earnings impact”, and broadens the group’s relationships with key customers and stakeholders, the company adds.
UHG anthracite is essential for the commercial production of low-carbon steel and can reduce carbon emissions from the production process by up to 74%.
The expansion into the US enables delta to capitalise on the increasing demand for UHG anthracite, which is used in electric arc furnaces (EAFs). Over the past decade, anthracite exports from the US have grown at a compound annual growth rate (CAGR) of 10.6% from FY2014 to FY20234 .
Delta Dunia says the group’s anthracite reserves are sufficient to support mining activities for more than 25 years, and in turn, production capacity of up to 25 million tons of low-carbon steel annually.
Established in 1990, PT Delta Dunia Makmur is a holding company operating in Indonesia, Australia, and at the completion of the transaction, the US.
In 2023, Delta Dunia expanded its portfolio with the addition of two subsidiaries – PT Bukit Teknologi Digital (BTech), offering mining technology solutions, and PT BISA Ruang Nuswantara, a social entity dedicated to education, vocational schools, and fostering a circular economy.
Write to Adam Orlando at Mining.com.au
Images: ACG
