Contura Energy, Inc.’s merger with Alpha Natural Resources Holdings, Inc.

Contura is being advised by Ducera LLC, Davis Polk & Wardwell LLP, and Jefferies LLC. Alpha is being advised by Moelis & Company LLC and Katten Muchin Rosenman LLP.

Contura Energy, Inc. (“Contura”), along with ANR, Inc. and Alpha Natural Resources Holdings, Inc. (together, “Alpha”), today announced that the companies have entered into a definitive merger agreement providing for an all-stock transaction to create a premier U.S. metallurgical coal platform and cost-competitive thermal coal portfolio. The transaction, which has been unanimously approved by the boards of directors of all parties, is expected to close in the third quarter of 2018, subject to Alpha shareholder approval and the satisfaction of other customary conditions.

Under the terms of the agreement, Alpha shareholders will receive 0.4071 Contura common shares for each ANR, Inc. Class C-1 share and each Alpha Natural Resources Holdings, Inc. common share they own, representing approximately 46.5% ownership in the merged entity. In connection with the transaction, Contura is also expected to file a registration statement on Form S-4 with the U.S. Securities and Exchange Commission and list its common stock on the New York Stock Exchange. Contura shares currently trade on the OTC Market.

The resulting combination is expected to enhance competitive positioning and generate meaningful cost synergies in the range of $30 million to $50 million annually, including through coal blending optimization as well as purchasing, operating, administrative, and capital allocation efficiencies.

The combined entity will retain the Contura Energy name and be led by Contura’s existing management team, with Kevin Crutchfield continuing as chief executive officer. Alpha’s chairman and chief executive officer, David Stetson, will resign his role and transition to the Contura board. Immediately after closing, the Contura board will be composed of the five existing Contura directors as well as the following four individuals who currently serve on Alpha’s board: David Stetson, Daniel Geiger, John Lushefski, and Harvey Tepner.

Post-merger, Contura’s assets will primarily be comprised of a diversified production profile of high-quality, metallurgical and thermal coal mines in Central Appalachia, its highly efficient longwall thermal coal mine in Northern Appalachia, one of the largest met coal reserves in the U.S. allowing for near-term organic growth opportunities, and industry-leading export capacity through its 65 percent ownership interest in the world-class Dominion Terminal Associates (DTA) coal export facility located in Newport News, Virginia. On a pro-forma basis for the full-year 2017, the combined entity sold approximately 12.6 million tons of metallurgical coal and 13.8 million tons of thermal coal, excluding sales from divested assets.

Contura Energy, Inc. provides coal mining services. The company, led by Kevin S Crutchfield, Charles Andrew Eidson and J Scott Kreutzer, in 2017 recorded $1.297 Billion Revenues.

The Davis Polk corporate team includes partners William L. Taylor (Picture) and Lee Hochbaum and associates Albert Zhu and Daisy Wu. Partner David H. Schnabel and associate Elina Khodorkovsky are providing tax advice. Partner Jeffrey P. Crandall and associate Christie Michelle Falco are providing executive compensation advice. Partner Byron B. Rooney is providing capital markets advice.

Involved fees earner: William Taylor – Davis Polk & Wardwell; Lee Hochbaum – Davis Polk & Wardwell; Albert Zhu – Davis Polk & Wardwell; Daisy Wu – Davis Polk & Wardwell; David Schnabel – Davis Polk & Wardwell; Elina Khodorkovsky – Davis Polk & Wardwell; Jeffrey Crandall – Davis Polk & Wardwell; Christie Michelle Falco – Davis Polk & Wardwell; Byron Rooney – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Contura Energy, Inc.;


Author: Ambrogio Visconti