July 5, 2017

USAP Rejects Synalloy's Merger Proposal

Synalloy Corp., Richmond, Va., has acquired a 3 percent ownership position in Universal Stainless & Alloy Products, the first step in a proposal to merge the two companies. Synalloy presented the plan to the USAP board of directors.

The USAP board unanimously rejected the unsolicited proposal, claiming it offered no financial or strategic benefit to the shareholders of Universal Stainless. The board also claims there is no basis for further discussions.

“We believe that a combination of Synalloy and Universal Stainless offers immediate as well as future value to both shareholder groups. Product lines, distribution channels, end markets served and geographic proximity of manufacturing facilities provide opportunities for cost savings and new business development. Additionally, the elimination of duplicative corporate overhead and related public company costs is estimated at $3 million annually,” says Craig Bram, president and CEO of Synalloy.

“In a normalized demand market, the combined company would have annual revenue and EBITDA of $475 million and $60 million, respectively. The balance sheet would be substantially larger, providing the resources to more aggressively pursue a growth by acquisition strategy. Ultimately, the metals segment of the combined company could be a leading supplier of specialty steel products with an emphasis on stainless steel, nickel alloys and other premium alloy products, serving every major end market in the industrial economy,” Bram says.


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Monday, December 18, 2017