March 2, 2016

Castle Divests Energy Assets

In keeping with its plans to divest its energy holdings, A.M. Castle & Co., Oak Brook, Ill., has found a buyer for the inventory at its Edmonton and Houston facilities, which will close once the sale is complete. Triple-S Tube Supply, a joint venture between Houston’s Triple-S Steel Supply Co. and Paul Sorensen, will purchase the material from Castle. Sorenson is the former owner of Tube Supply, which he previously sold to Castle. The sale will generate approximately $27.5 million for Castle, which it will use to reduce debt.

“The sale of the vast majority of our remaining energy-related inventory, including material that traces to the former Tube Supply acquisition, significantly reduces the company’s exposure to oil-related market fluctuations. More importantly, sale of these assets will provide us with additional liquidity and is a further step in our recent refinancing activities to de-lever the company’s balance sheet,” says Steve Scheinkman, president and CEO of A.M. Castle. The company continues to seek a buyer for its Total Plastics subsidiary.

Following the transaction, Castle will focus primarily on two key commercial end markets: aerospace and industrial. “These markets tend to be more stable over the long-term, and we believe our competitive position is strong and improving in both sectors,” he adds.

Gary Stein, president of Triple-S Steel Supply, confirmed the creation of the joint venture and its acquisition of Castle’s inventory. As part of the transaction, Triple-S Tube Supply also will purchase the trade name rights to the Tube Supply brand. Castle will transfer some of its employees from the Houston and Edmonton facilities to other company locations, and other employees will be encouraged to join Triple-S Tube Supply.

“We believe the savings associated with the closing of these facilities will improve our ability to generate cash from operations, which we intend to reinvest in the business to better position the company for long-term success,” says Pat Anderson, Castle’s executive vice president and chief financial officer.



September 2017: Numbers Don’t Add Up for Service Centers
More...
 
Pause
September 2017: Lichtenstein: Five Steel Truths that Demand Attention
More...
Fall 2016: Cutting & Sawing Equipment
More...
Summer 2017
More...
 
Pause
Advanced Controls on Braner Slitters
More...
AHVS Precision Leveler Features Flip-Top Design
More...
Formtek’s Tishken Slitter Increases Production Volume
More...
Red Bud System Handles High-Strength Steels
More...
Bradbury Launches Flat Trak CL Monitoring System
More...
Artus Knives Custom Designed
More...
 
Pause
Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Monday, October 23, 2017