Daily News: November 2, 2012

Rentech Acquires Agrifos; GE Agents Credit Facility Amendment

Rentech Nitrogen Partners announced that it completed its previously announced acquisition of Pasadena, TX-based Agrifos, a producer of synthetic granulated ammonium sulfate fertilizer in North America. The business will become a subsidiary of Rentech Nitrogen.

Rentech Nitrogen reiterated its expectation that the Agrifos transaction will be accretive to cash available for distribution per unit beginning in 2013. The transaction is expected to have an immaterial impact on Rentech Nitrogen’s per unit cash distribution for Q4/12. Rentech Nitrogen expects the Pasadena facility to generate approximately $20 million in operating income and approximately $25 million in EBITDA in 2013, excluding one-time integration and transition costs.

“We are excited to bring this strategic facility into Rentech Nitrogen’s portfolio of assets. We expect its integration to proceed quickly and smoothly and we intend to initiate our first planned organic growth project at the Pasadena plant shortly,” said D. Hunt Ramsbottom, CEO of Rentech Nitrogen.

In conjunction with the acquisition, Rentech Nitrogen amended its existing debt facility, and expanded its borrowing base from $135 million to $300 million. The amended facility includes an accordion feature to expand the debt capacity by $35 million, subject to new lending commitments, to finance future growth projects. GE Capital served as administrative agent and GE Capital Markets served as sole lead arranger and book-runner for the debt facilities.

The initial purchase price of the acquisition was $158 million. $138 million of the initial purchase price was provided in cash through the amended credit facility. The remainder of the purchase price was provided in the form of 538,793 common units of Rentech Nitrogen, valued at $20 million based on the 30-day volume-weighted average price of the common units prior to signing the acquisition agreement.

Dan Cohrs, CFO of Rentech Nitrogen stated, “These expanded credit facilities give us flexibility to fund our capital program, both at East Dubuque and at our new Pasadena facility. We continue to have a $35 million undrawn revolver and a comfortable cash balance. The excess proceeds of the term loan and the new $10 million capital expenditures facility help us to fund required capital at the Pasadena plant.”

Imperial Capital, LLC and BMO Capital Markets acted as financial advisors to Rentech Nitrogen in connection with the transaction.

Rentech Nitrogen was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen’s assets consist of two fertilizer production facilities.

The Pasadena plant’s other products, which are sold domestically, include ammonium thiosulfate fertilizer and sulfuric acid. The plant uses ammonia and sulfur as its primary feedstocks.