VIENNA (Reuters) - Vienna-based fireproof materials maker RHI Magnesita ( RMGNF ) plans to buy Resco Group, a U.S.-based producer of alumina and refractories for an enterprise value of up to $430 million, the companies said.

RHI Magnesita ( RMGNF ) said in a statement the acquisition would continue its growth in alumina-based refractories by providing U.S. customers with an improved range of products. Refractories are materials extremely resistant to heat and wear.

"The acquisition advances our 'local for local' production strategy and will shorten supply chains, improve our speed of reaction, and increase the security of supply of refractories for our customers," RHI Magnesita ( RMGNF ) CEO Stefan Borgas said.

The cash consideration for the acquisition is expected to be around $324 million, with an upper cap of about $342 million if the completion extends 18 months beyond signing, the company said.

It will be funded by RHI Magnesita's ( RMGNF ) existing liquidity and a new committed facility of 200 million euros ($216 million).

Resco recorded unaudited revenues of $252 million in 2023 with profit before tax of $20 million, RHI Magnesita ( RMGNF ) added.

Synergies will be created after restructuring the combined supply chain. The process is expected to take about two years and will create one-time costs of 60 million euros, including restructuring at non-U.S. plants, the company said.

The acquisition is subject to customary closing conditions including merger control authority approval, and is expected to be completed in the second half of this year.

The combined company would have 15 production sites across the United States, Canada and Mexico, Resco said in a statement.

Resco is owned by Balmoral Funds, a California-based private equity firm with about $1.5 billion of assets under management, the companies said.

($1 = 0.9270 euros)

(Writing by Dave Graham; editing by Barbara Lewis)