Deal Synopsis:
The Lenox Group supported a management team of former Alcoa and Reynolds Metals executives in acquiring the Sherwin Alumina facility of Alcoa (NYSE: AA), the 9th largest alumina refinery in the world.
The Lenox Group prepared a descriptive memorandum, a detailed, robust financial model, and an investor presentation describing the investment opportunity. The memorandum highlighted the key investment considerations, a post-transaction capital structure, and the company’s historical production levels and pricing, operations, sales force, marketing initiatives, industry dynamics, and management team backgrounds. The investor presentation was used during meetings with management and included additional details regarding the company’s cost reduction plans and projected revenue/profitability associated with ongoing operations.
Lenox worked with management to select a leading institutional investor that provided both equity and mezzanine financing, thereby maximizing the amount of equity that the management team would own post-closing. Lenox secured a senior debt facility to support the acquisition. Lenox also negotiated a gas hedge with Alcoa for future natural gas requirements.
Lenox was able to maximize the management team’s ownership at closing and close the transaction. The entire capital structure was placed with investors and lenders within 45 days to comply with Department of Justice timeline that governed the timing of the divestiture by Alcoa.