Pritzker family to acquire US scrap mill servicing company TMS in $1-bn deal
26 August 2013
The Pritzker family, one of the wealthiest families in the US, is buying scrap mill servicing company TMS International Corp in a $1-billion cash deal that includes refinanced third-party debt.
TMS stockholders will get $17.50 in cash for each Class A and Class B common stock. The price represents a 12 per cent premium over the Pittsburgh-based company's Friday closing stock price.
The TMS board has unanimously approved the merger and private equity firm Onex Corp, which holds approximately 60 per cent of TMS stock, has agreed to tender its shares to the deal.
TMS, which listed on the NYSE in 2011, said the deal boosts returns for its shareholders and positions it to expand globally as a privately held company.
TMS is the largest provider of outsourced industrial services to steel mills in North America and has a substantial and growing international presence. TMS provides mill services at 81 customer sites in 12 countries and operates 36 brokerage offices from which it buys and sells raw materials across five continents.
''We have built a world-class outsourced industrial services company over the past six years during our partnership with Onex. With this transaction, we are pleased to be able to maximise 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, Raymond Kalouche, TMS president and CEO.
Tom Pritzker, chairman and CEO of The Pritzker Group, said, ''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. We are delighted to have the opportunity for TPO to participate in and support the growth of the business over the long-term. Throughout TPO's history, we have partnered with strong management teams to build durable businesses for the future.
The Pritzker family, which founded the Hyatt Hotels, said the transaction will be financed through a combination of debt and equity commitments, with debt financing being provided by Goldman Sachs and JP Morgan, while equity funding is being provided by business interests of Tom Pritzker and Gigi Pritzker.