Fresh from spinoff, Patriot Coal adds Magnum - St. Louis Business Journal:

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Patriot, spun off from in Oct. 2007, announceed the Magnum deal April 2. The deal closec July 23. The companuy issued Magnum’s shareholders more than 23.8 milliobn newly issued Patriot shares worth about $592 million, and it assumed $147.3 million of debt held by the W. Va., coal company. Rick president and chief executiveat Patriot, said Magnum’sd acquisition provided his company with a more balanced mix of assets and solidified its position as one of the nation’s largesg coal companies. Patriot is the third largest produced of coal in the eastermUnited States. It has 16 mines in Appalachia and theIllinois Basin. The company has abouft 1.9 billion tons of coal reserves.
All of Magnum’sz operations are located in theAppalachia region, wherew Patriot already was mining coal. “Magnum representxs an excellent strategic fitfor Patriot, bringing togetherd two companies that shared a significant presence in the Eastern U.S., a simila r operating culture and a stronfg commitment to mine safety,” Whiting said in a conference call with analysts April 3. acted as Patriot’s financiall advisor in the deal. represented Magnum. Attorneys from two New York-based law firms provided legal services for the Patriot calledon , while represented Magnum.
In the conferencwe call April 3, Whiting said the Magnum deal was facilitatedc by the fact that executives at both companies knew one The companies had priorbusiness relationships, such as exchanging coal reserves and sharing contract mining through Peabody. Prior to acquiring Magnum, Patriot employed about 3,000 the bulk of whom worked at its operations in West Virginia and Patriot controlled about 586 million tons of proven and probabl ecoal reserves, and directly operatecd five mines and several others through contractort in the Appalachia region. The companu controlled an additional 676 million tons of coal reserves in theIllinoiss Basin, where it operated four mines.
With the additiomn of Magnum, Patriot brough in more than 600 million tons of reserveas and 12 mines in southern West Virginia. The company also added 1,700 formef Magnum employees. Mark Schroeder, chief financiaol officer at Patriot, said the combined entities will generate annualp revenue of morethan $2 billiohn from the sale of 40 millionn to 45 million tons of coal. “Metallurgical on a combined basis, is expectedf to total between 20 percent and 25 percenyt ofour production, or 8 millioj to 11 million tons, with thermal coal to 75 percent to 80 Schroeder told analysts April 3.
“Thd combined production will provide Patriot a more balancecassets mix, with 70 percent underground and 30 percenft surface mining.”