GP Investments in $642m magnesite deal

Fresh from inking Latin America’s largest LBO to date, GP Investments has struck a $642 million deal for Brazilian refractory materials producer Magnesita.

Brazilian private equity firm GP Investments is set to take control of Magnesita, Latin America’s largest refractory materials producer, in a deal worth R$1.24 billion ($642 million, €470 million).

The transaction includes an equity component of R$680 million; of that amount, GP Capital Partners III will contribute R$98 million and GP Capital Partners IV will contribute R$386 million. Co-investors have committed R$143 million and GP Investments will invest another R$53 million, which may be syndicated among other investors, the firm said in a statement.

The R$560 million in debt financing for the deal has been secured, the statement said.

Magnesita owns and explores magnesite reserves in Brazil’s Bahia, Ceara and Minas Gerais, and has six plants in Brazil and one in Argentina. Steelmaking, glass and cement industries are beneficiaries of its products and services. Last year, the company reported net revenues of R$1.1 billion, and EBITDA of R$229 million, according to a statement.

GP Investments last week announced the biggest LBO to date in Latin America, a $1 billion agreement for Pride International’s Latin American Land Drilling and E&P Services businesses. Last month, the firm closed its fourth fund on $1.025 billion.