Transaction Overview

• The Lenox Group supported a management team of former Alcoa and Reynolds Metals executives in acquiring the alumina division of Alcoa which included the 9^th largest alumina refinery in the world.
• Raised senior debt, subordinated debt and equity capital to facilitate the transaction.
• Advised management on acquisition price and structuring of buy-out.
• Enabled management team and private equity group to secure asset-based financing in otherwise difficult market thus maximizing leverage.
• Negotiated three year agreements with Alcoa to fix the price of alumina sold to Alcoa as well as the price of natural gas, a key production cost, at a historical average in a turbulent natural gas pricing environment.

Transaction Process

• The Lenox Group prepared a descriptive memorandum and an investor presentation describing the investment opportunity.  The memorandum highlighted the key investment considerations, a post-transaction capital structure, and the company's history, product lines, operations, sales force, marketing initiatives, industry dynamics, and management team backgrounds.  The investor presentation was used during meetings with management and included additional details regarding the company's cost reduction plans and projected revenue/costs associated with ongoing operations.
• The Lenox Group contacted over 40 potential equity investors, sent the memorandum to approximately 25 interested parties, held meetings with eight equity/mezzanine groups, received eight term sheets thus creating an auction environment and an extremely competitive process.  Selected a leading institutional investor that provides both equity and mezzanine, thereby maximizing the amount of equity that the management team would own post-closing.
• The Lenox Group also contacted over 15 potential senior debt providers, sent the memorandum to approximately 12 interested parties, held meetings with four senior debt providers and received four term sheets, again creating a competitive bidding process. 

Transaction Benefits

• Maximized management team ownership at closing.
• Structured a transaction that was readily acceptable in today's debt markets and provided attractive return expectations for equity/mezzanine groups.
• Placed entire capital structure with investors and lenders within 45 days to comply with Department of Justice timeline that governed the timing of the divestiture by Alcoa.