SunCoke will receive 100% ownership interest in the deal with the international mining, metals and minerals marketer and will combine its available cash and an existing credit facility to pay for the asset.
While subject to regulatory approvals and other customary conditions for closing, the pair anticipate the transaction will close in the fourth quarter of this year.
KRT, a leading metallurgical and thermal coal blending/handling terminal service provider, has the collective capacity to blend and transload more than 30 million tons annually.
It owns four coal handling facilities, the largest being the Ceredo terminal on the Ohio River in West Virginia that serves both domestic and international export markets using strong rail logistics that involve both CSX and Norfolk Southern.
KRT's other facilities are on the Big Sandy and Kanawha rivers in West Virginia and on Kentucky Highway 1185 near Louisa, Kentucky.
The firm also owns an idled liquids terminal on the Ohio River with a capacity of more than four million gallons of liquid storage.
In total, SunCoke officials said, the portfolio had the capabilities to deliver to all US ports on the East Coast, Gulf Coast and Great Lakes thanks to its river, highway and railroad proximity.
“KRT is an excellent strategic fit with SXCP and advances our position in coal logistics,” chairman and chief executive officer Fritz Henderson said.
“With this acquisition, we further integrate our cokemaking business with coal handling operations that currently support our Middletown and Granite City cokemaking facilities.
“We also will broaden our customer base to serve companies in the coal, steel and public utility industries.
“We anticipate KRT's operations will be immediately accretive and contribute to future earnings and distributable cashflow growth.”
KRT is expected to handle about 15Mt of coal this year, about 56% of it metallurgical.
Based on SunCoke’s preliminary outlook and anticipated financing plan, it said the KRT operations should be accretive to its distributable cash flow by approximately $6 million, or 18c per common unit, on an annualized basis.
The producer’s acquisition of Lakeshore Coal Handling is pending but expected to close later in the third quarter.
