Photo: Mead Gruver, Associated Press
Houston pipeline firm Genesis Energy is branching out with the purchase of the world’s largest natural soda ash business for almost $1.33 billion.
Genesis is acquiring from Connecticut-based Tronox Ltd. the alkali mining business that produces soda ash at its Green River, Wyo. facilities, which are home to the world’s largest trona ore deposit.
The alkali business mines and processes trona ore to produce soda ash, which is used in everything from the manufacturing of glass to paper to swimming pool treatment chemicals. The business produces about 4 million tons of natural soda ash per year, which is more than 25 percent of all the natural soda ash produced in the world.
Genesis is partnering with major New York private equity firms KKR Global Infrastructure and GSO Capital Partners to help fund the deal.
Genesis CEO Grant Sims said the deal helps Genesis expand and diversify. While Genesis is mostly focused on pipelines, those pipelines also serve a lot of refineries and petrochemical facilities.
“The business is a great strategic fit with our current asset base and shares many characteristics with our existing refinery services business,” Sims added. “It is a market leader with high barriers to entry.”
KKR and GSO agreed to contribute $750 million combined to buy 22.2 million units of Genesis for $33.71 per unit to help finance the deal and invest in Genesis.
The deal is Genesis’ biggest move since 2015 when it bought Enterprise Producers Partners’ offshore pipeline network in the Gulf of Mexico for $1.5 billion.