Published August 26, 2013
Scrap mill servicing company TMS International (TMS) unveiled a deal on Monday to be acquired by the billionaire Pritzker family for $687 million in cash.
The transaction gives the Pritzker family control of the largest provider of outsourced industrial services to steel mills in North America by revenue. Based in Glassport, Pa., TMS operates 36 brokerage offices and provides mill services to 81 customer sites in 12 countries.
The buyout offers TMS shareholders $17.50 a share, which represents a 12.4% premium on the company’s Friday closing price of $15.57.
"TMS is a leading provider of mill, procurement, and logistics services to the steel industry, with an exceptional management team and a proven track record of delivering value to its customers,” Tom Pritzker, chairman and CEO of The Pritzker Organization, said in a statement.
When refinanced debt is included in the bid, the value of the deal rises to about $1 billion.
The Pritzker family plans to finance the deal through a mix of debt and equity commitments and is not conditioned upon the consummation of financing.
“With this transaction, we are pleased to be able to maximize stockholder returns while positioning ourselves to continue to deliver exceptional value for our customers and expand our global operations as a privately held company, with TPO as our new long-term partner,” said TMS CEO Ryamond Kalouche.
The deal, which is subject to antitrust and other approval, is expected to close in the fourth quarter, paving the way for TMS to become a privately-held company.
The deal has already been approved by Onex Corp., the Toronto-based private-equity firm that owns 60% of TMS. The sale will leave Onex with total proceeds of about $504 million, including proceeds from the company’s initial public offering.
"TMS' strong relationships with leading global steel producers and its relentless focus on delivering exceptional value for its customers resulted in significant growth for the business, particularly internationally, despite challenging market conditions," Tim Duncanson, a managing director of Onex, said in a separate statement.