Mumbai, June 4: Hyderabad-based Rain Calcining Ltd will acquire the US firm CII Carbon LLC for $595 million in an all-cash deal.

The acquisition will be made through its US subsidiary, Rain/CII Holdings Inc.

The combined entity will be the world’s largest producer of calcined petroleum coke (CPC) with a capacity of over 2.4 million tonnes. CPC is a raw material used in aluminium. It is also used in the manufacture of titanium dioxide and steel.

“This acquisition is a major step in Rain’s long-term strategy to become a global calcining company,” said Gerard M. Sweeney, president of Rain/CII Holdings.

Rain Calcining has the biggest manufacturing facility for CPC in Asia with a capacity of about 480,000mtpa, which can meet 8 per cent of the global demand. The company also generates about 50mw surplus electricity and sells it to industries in Andhra Pradesh.

CII Carbon is the second largest producer of CPC in the world, with an annual production of about 1.84mt.

The privately held company, has a diversified customer base spread across many countries.

The acquisition will enable Rain Calcining to capture many synergies and growth opportunities offered by the overseas company. Moreover, the company will be able to achieve annual sales of about $550 million.

The deal will enable the company to leverage its assets worldwide to supply to the aluminium and titanium dioxide industries.

CII Carbon will handle the supply and marketing responsibilities of Rain Calcining in the future. Citi and ICICI Bank will arrange for finances for the acquisition. Rain Commodities (USA), a subsidiary of group company Rain Commodities Ltd, expects to invest $92 million in convertible non-voting preferred stock in Rain/CII Holdings to part-finance the acquisition.

The transaction will be finalised by June. The company said it would double its capacity to about 1 million tonnes by adding two new kilns in Vishakhapatnam by 2009.

The announcement sent the Rain Calcining stock up 20 per cent to close at Rs 42.60 on the NSE today.