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Insteel Industries to Acquire PC Strand Business of American Spring Wire
08/12/2014 - Insteel Industries Inc.’s wholly-owned subsidiary, Insteel Wire Products Company (together referred to as Insteel) has entered into an asset purchase agreement to acquire substantially all of the assets associated with the prestressed concrete strand (PC strand) business of American Spring Wire Corporation (ASW) for a purchase price of approximately US$36 million, subject to certain post-closing adjustments.
The transaction is expected to close on or before 15 August 2014.
ASW is North America's largest manufacturer of valve and commercial quality spring wire. ASW manufactures PC strand at facilities located in Texas and Georgia. For the twelve months ended 30 June 2014, ASW's sales of PC strand were US$67.8 million.
Under the terms of the purchase agreement, Insteel will acquire, among other assets, the accounts receivable and inventories related to ASW's PC strand business, the production equipment at ASW's facility in Houston, Texas, and the production equipment and facility in Newnan, Ga. Insteel will lease the Houston facility from ASW. The purchase price is subject to an adjustment to be determined based upon the closing working capital balance. The transaction will be funded from cash on hand and borrowings on Insteel's US$100 million revolving credit facility.
"The ASW acquisition significantly enhances the footprint of Insteel's PC strand business in our largest and highest growth markets," commented H.O. Woltz III, Insteel president and chief executive officer. "We also believe that the integration of these operations with our existing PC strand facilities in Tennessee and Florida will provide considerable synergy potential through higher productivity levels and improved operating costs."
Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets PC strand and welded wire reinforcement, including engineered structural mesh (ESM), concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, N.C., Insteel operates nine manufacturing facilities located in the United States.
ASW is North America's largest manufacturer of valve and commercial quality spring wire. ASW manufactures PC strand at facilities located in Texas and Georgia. For the twelve months ended 30 June 2014, ASW's sales of PC strand were US$67.8 million.
Under the terms of the purchase agreement, Insteel will acquire, among other assets, the accounts receivable and inventories related to ASW's PC strand business, the production equipment at ASW's facility in Houston, Texas, and the production equipment and facility in Newnan, Ga. Insteel will lease the Houston facility from ASW. The purchase price is subject to an adjustment to be determined based upon the closing working capital balance. The transaction will be funded from cash on hand and borrowings on Insteel's US$100 million revolving credit facility.
"The ASW acquisition significantly enhances the footprint of Insteel's PC strand business in our largest and highest growth markets," commented H.O. Woltz III, Insteel president and chief executive officer. "We also believe that the integration of these operations with our existing PC strand facilities in Tennessee and Florida will provide considerable synergy potential through higher productivity levels and improved operating costs."
Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets PC strand and welded wire reinforcement, including engineered structural mesh (ESM), concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, N.C., Insteel operates nine manufacturing facilities located in the United States.
