Genesis Energy LP is expanding into the chemicals sector by acquiring the alkali business of Stamford-based Tronox Ltd., the world’s largest producer of natural soda ash, for about $1.33 billion in cash.
Genesis, headquartered in Houston, said it would raise about $750 million through a convertible preferred units issue to fund the deal. The company received binding commitments from investment vehicles affiliated with KKR Global Infrastructure Investors II LP and GSO Capital Partners LP for the purchase of the 8.75 percent units.
KKR and GSO will buy about 22.2 million units at $33.71 each, Genesis said.
Tronox’s alkali business produces about 28 percent of the world’s natural soda ash output. Soda ash or sodium bicarbonate is used in the making of glass, baked goods, detergents and a variety of other industrial chemicals and products.
Tronox said it would use the proceeds from the sale to fund most of the cash needed to buy Cristal’s titanium dioxide business. In February, Tronox agreed to buy the titanium dioxide business, a subsidiary of Saudi Arabia’s Tasnee, for $1.67 billion, making Tronox the world’s largest producer of the whitening pigment.
Credit Suisse is acting as financial adviser to Tronox on both the deals.