Natural Resource Partners Lp Limited Partnership · NYSE:NRP
Natural Resource Partners Lp Limited Partnership — Natural Resource Partners — Merger or Acquisition (January 2013)
18 slides from Natural Resource Partners Lp Limited Partnership's merger presentation, Jan 23, 2013
Slide 1: OCI Wyoming Acquisition Trona Interests
Exhibit 99.2 OCI Wyoming Acquisition Trona Interests January 23, 2013
Slide 2: Forward Looking Statements
Forward Looking Statements The statements made by representatives of Natural Resource Partners L.P. (“NRP”) during the course of this presentation that are not historical facts are forward- looking statements. Although NRP believes that the assumptions underlying these statements are reasonable, inv
Slide 3: Acquisition of Trona / Soda Ash Operations and Assets
Acquisition of Trona / Soda Ash Operations and Assets 3
Slide 4: Transaction
Transaction • NRP acquired Anadarko Petroleum Corporation’s (APC) ~49% equity interest in OCI Wyoming, consisting of trona ore mining operations and a soda ash refinery located in the Green River Basin, Wyoming • NRP acquired APC’s interest for a price of $292.5 million plus an earn-out of up to a n
Slide 5: Strategic Rationale
Strategic Rationale • Further diversification of NRP’s revenue – Soda ash revenue tied to broad and diverse set of industrial markets – Favorable supply / demand fundamentals – Trona mining and processing operations not a focus of environmental or geopolitical concerns • Stable to increasing distrib
Slide 6: Key Operating Metrics – OCI Wyoming
Key Operating Metrics – OCI Wyoming • Sales and Pricing: – Historical annual sales of refined soda ash: 2.3-2.5 mm tons (approximately 2/3rds exported) – 90% of export sales arranged by ANSAC (three member co-op: OCI, FMC, and Tata); ANSAC is the largest soda ash exporter at ~4 mm metric tons of nat
Slide 7: Pro Forma Ownership Structure and Distributions
Pro Forma Ownership Structure and Distributions OCI Chemical NRP Operating Corporation OCI Wyoming Co. 100% OCI Wyoming NRP Trona LLC Holding Co. OCI Wyoming L.P. • NRP is due a preferred return of $4.7 million per year from OCI Wyoming Co.(accruing interest at 9% per annum in the event not paid) •
Slide 8: OCI Company Ltd. (Korean Parent)
OCI Company Ltd. (Korean Parent) • Headquartered in Seoul, Korea, OCI Company Ltd. (OCI Korea) is a global company with a market capitalization of ~$4.5 billion • OCI Korea’s product portfolio spans the fields of inorganic chemicals, petro and coal chemicals, fine chemicals, renewable energy and ins
Slide 9: 2012 Diversity of Revenue Proforma for Acquisition
2012 Diversity of Revenue Proforma for Acquisition 2012 Revenues 2012 Revenues Nine Months Actual, Three Months Forecast Pro Forma for OCI Acquisition Oil & Gas Oil & Gas 2% 2% Other Aggregates Other 7% 4% 8% Met Coal 27% Met Coal 32% Aggregates & Industrial Coal I/structure, Minerals ORR, Mins 15%
Slide 10: Trona/Soda Ash Fundamentals and Markets
Trona/Soda Ash Fundamentals and Markets 10
Slide 11: Trona / Soda Ash Fundamentals
Trona / Soda Ash Fundamentals Trona ore is a naturally occurring form of soda ash, used worldwide in manufacturing a variety of consumer products, primarily including glass, chemicals, soap, and paper Soda ash can also be produced synthetically from limestone, and even though synthetic capacity is g
Slide 12: Global Production Capacity and Demand
Global Production Capacity and Demand 2011 2012 Est. 2013 Fcst. TOTAL TOTAL TOTAL Nameplate Capacity 63,000 65,000 68,000 Effective Capacity 58,000 60,000 64,000 Production Estimate 52,000 53,000 56,000 Demand 52,000 53,000 55,000 Year-over-Year Growth 7.7% 1.9% 3.8% Capacity Utilization 89.7% 88.3%
Slide 13: Competitive Landscape
Competitive Landscape Five producers of natural soda ash in the U.S., four located in Green River, Wyoming and one, Searles Valley, in California OCI Wyoming produces approximately 20% of the total U. S. production of natural soda ash OCI 20% FMC 32% SVM 8% Solvay 19% General 21% 13
Slide 14: U.S. Production and Demand
U.S. Production and Demand U.S. domestic demand and supply is fairly stable with almost 100% capacity utilization The export market is a key profit growth opportunity for U.S. producers Prices increased at a CAGR of 7% from 2007 through 2011 WY Historical Soda Ash Output 15.0 134 150 130 122 116 12.
Slide 15: Financing of Transaction & Liquidity
Financing of Transaction & Liquidity Purchase Price of $292.5 million, plus an earn-out of up to $50 million based on OCI performance criteria for 2013, 2014, and 2015 Financing: – $200 million funded with new 3-year term loan – $76.5 million in equity issued to Sponsors at closing, including a $1.5
Slide 16: Term Loan Component
Term Loan Component Borrower: NRP (Operating LLC) Guarantors: All existing and future Material Subsidiaries Purpose: Partial funding of OCI Wyoming Acquisition Size / Tenor / Type: $200 mm / 3-Year / Senior Unsecured Term Loan Facility Interest Rate: LIBOR + 200bps Interest Coverage 3.5x Financial C
Slide 17: Equity Component
Equity Component Raised $76.5 million Issued $75 million in private placement equity to affiliates of NRP’s general partner: – Corbin J. Robertson, Jr, Chairman and CEO of NRP, and members of his family – Chris Cline – S. Reed Morian – W. W. Scott, Jr. – 3,784,572 units issued at a discount rate of
Slide 18: Conclusions
Conclusions The acquisition represents a significant step in NRP’s efforts to diversify its portfolio of revenues OCI has a long production and sales history in a relatively stable, slow growth market – OCI is a low cost producer with high quality reserves that have an estimated life in excess of 60
Natural Resource Partners — Merger or Acquisition (January 2013) on 6ix