North American Coal Corporation Acquires Reed Companies for $62.5M

The North American Coal Corporation announced today that it acquired, through a wholly owned subsidiary, four related companies - Reed Minerals, Inc., Reed Hauling Inc., C&H Mining Company, Inc. and Reed Management, L.L.C. - from members of and entities controlled by the Reed family. These companies, which will be known as Reed Minerals, are based in Jasper, Alabama and are involved in the mining of bituminous coal. The acquisition, which was funded using borrowings under North American Coal's existing credit facility, was completed for a preliminary purchase price of approximately $62.5 million, less certain amounts specified in the purchase agreement to complete the transaction on a "cash-free, debt-free" basis. The terms of the transaction also include an earn-out contingent on the average coal selling price received on the first 15 million tons of coal sold by North American Coal from the Reed Minerals operations. The earn-out payments will be paid quarterly and, if payable, will commence in the third quarter of 2012.