No. of Recommendations: 1
A few years ago, one of Brookfield's satellite entities Brookfield Business Partners (BBU) bought Graftech. At the time BBU bought Graftech, the company was about to go bankrupt. Graftech is a manufacturer of carbon and graphite products. Graftech gets most of it's revenue from selling Graphite electrodes used to melt scrap steel in electric arc furnaces. Nucor buys Graphite electrodes from Graftech. Generally, as the worldwide steel industry goes, so goes Graftech. Brookfield bought Graftech as the steel industry was slumping. I remember at the time asking myself why BBU was buying such a horrible business.

Well this would be why:

GrafTech International Ltd. is seeking to raise more than US$800 million in an initial public offering that could value the company at more than 11 times what owner Brookfield Asset Management Inc. paid for it, according to people familiar with the matter.

GrafTech, which is wholly owned by Brookfield’s private equity group, is seeking a valuation of at least US$8 billion for the entire company in the share sale, said the people, who asked not to be identified because the matter is private. The valuation could be as high as US$10 billion, one of the people said. That value would be about 10 times the company’s earnings before interest, taxes, depreciation and amortization.


Brookfield would be among the best at buying low and selling high.

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