Arch Coal, Inc./International Coal Group, Inc.
On May 2, 2011, Arch Coal, Inc. (NYSE: ACI) and International Coal Group, Inc. (NYSE: ICO) have entered into a definitive agreement whereby Arch will acquire all of the outstanding shares of ICG for $14.60 per share, in an all-cash transaction valued at $3.4 billion.
Arch has obtained committed bridge financing from Morgan Stanley and PNC to fund the acquisition and refinance certain of ICG's indebtedness. The company expects to raise permanent financing comprised of a mix of debt and equity. The majority of this financing would be through debt securities, with the equity portion being sufficient to retain the company's current credit ratings.
Arch anticipates that the transaction will be accretive to earnings in 2012. Arch also expects to generate significant free cash flow based on a well-balanced product portfolio of low-cost, high-quality assets that will be sold into structurally under-supplied met markets and growing thermal coal markets.
Morgan Stanley is acting as the financial advisor to Arch and Simpson Thacher & Bartlett LLP is providing legal counsel in connection with the transaction. UBS is acting as the financial advisor and Jones Day is providing legal counsel to ICG.
Arch has obtained committed bridge financing from Morgan Stanley and PNC to fund the acquisition and refinance certain of ICG's indebtedness. The company expects to raise permanent financing comprised of a mix of debt and equity. The majority of this financing would be through debt securities, with the equity portion being sufficient to retain the company's current credit ratings.
Arch anticipates that the transaction will be accretive to earnings in 2012. Arch also expects to generate significant free cash flow based on a well-balanced product portfolio of low-cost, high-quality assets that will be sold into structurally under-supplied met markets and growing thermal coal markets.
Morgan Stanley is acting as the financial advisor to Arch and Simpson Thacher & Bartlett LLP is providing legal counsel in connection with the transaction. UBS is acting as the financial advisor and Jones Day is providing legal counsel to ICG.
