Under the $US695 million deal - initially signed April 2 among Patriot, Magnum, Colt Merger, and ArcLight Energy Partners Fund I and II - Patriot also assumed a $136.5 million in net debt. Patriot said the transaction was part of its plan for “synergistic, accretive” acquisitions.
“The combination further broadens Patriot's asset base and significantly increases the company's surface mining capabilities,” Patriot said.
Magnum’s coal production will bring Patriot’s total met output for the year to between 7 and 8 million tons.
"This represents an excellent strategic fit for Patriot, bringing together two companies that share a significant business presence in the eastern United States, a similar operating culture and a strong commitment to mine safety. Importantly, the Patriot and Magnum properties are contiguous, which creates numerous synergistic opportunities," Patriot chief executive officer Richard Whiting said.
"Going forward, as the seventh largest coal producer in the US, we are poised to fully participate in very strong coal markets."
St. Louis will remain the home of the company’s corporate headquarters, while its operation’s home base will be Charleston, West Virginia.
Executive changes will include COO Paul Vining, senior vice president and chief financial officer Mark Schroeder, general counsel and corporate secretary Joseph Bean, corporate development senior vice president Charles "Chuck" Ebetino Jr, and human resources senior vice president K Susan Billiot all reporting to Whiting.
Reporting to Vining will be senior vice president and chief marketing officer Michael Altrudo, Southern Appalachian underground operations vice president and general manager John Hill, Appalachian surface operations vice president Michael Day, Kentucky operations vice president and general manager David Webb, Federal operations vice president and general manager J Blair McGill, engineering vice president Gary Halstead, and safety vice president Terry Hudson.
Magnum sold 18.4Mt of coal in 2007, and had over 600Mt of proven and probable reserves in southern West Virginia. The combined total proven and probable resources from the two companies amount to more than 1.9 billion tons.
