Synalloy to Explore Strategic Options, Including Company Sale
By Metal Center News Staff
on Apr 3, 2020
The board of directors of Synalloy Corp., Richmond, Va., is exploring a sale of the company, among other options. The company will engage in a comprehensive review of strategic alternatives once the current market stabilizes following the COVID-19 pandemic.
Board members said that ensuring a stable business and management continuity during this period of extreme market volatility, and then commencing a comprehensive review of strategic alternatives in a more secure market environment, offers the most prudent and deliberate path forward to create liquidity and to maximize value for all shareholders. The review of strategic alternatives will consider all options, including a sale of all or parts of the company, as well as continued governance and board composition enhancements, balance sheet and business optimization and management succession in the event that a liquidity event does not take place.
“The board and management team have a long tradition of listening to shareholders and actively considering all shareholder feedback. We have historically and consistently demonstrated a willingness to explore all options that might maximize value and provide liquidity to shareholders. said Murray H. Wright, chairman of the board.
Last month, Privet Fund Management and UPG Enterprises LLC informed Synalloy of its plans to nominate a slate of five director designees for election to the company’s board of directors to replace a majority of the board at the 2020 annual meeting of shareholders. Privet previously attempted to acquire the company in 2019.
The COVID-19 pandemic has presented global macro-economic headwinds that impact virtually every single public company in the United States, and Privet’s and UPG’s campaign to overhaul the board, management team and Synalloy’s business at this time of instability is, in the Board’s opinion, ill-timed and unproductive. For Privet and UPG to initiate a speculative and untested business turnaround in the midst of this global crisis would, in the Board’s view, destabilize the company and its workforce and jeopardize shareholders’ investments in Synalloy, a release from the board said.
Among other segments, Synalloy is a manufacturer of stainless steel pipe and tube and galvanized pipe and tube and serves as a master distributor of seamless carbon pipe and tubing.