Lakeside Steel Announces Interest in Acquisition of Barzel Assets
09/23/2009 - Lakeside Steel expresses interest in acquiring some or all of the assets of Barzel Industries, a processor and distributer of pipe and tube, through the Chapter 11 bankruptcy process.
Lakeside Steel Inc. has announced its interest in acquiring some or all of the assets of Barzel Industries Inc. through the Chapter 11 bankruptcy process.
Barzel and its U.S. subsidiaries voluntarily petitioned on September 15, 2009, for protection under Chapter 11 of the U.S. Bankruptcy Code. Its Canadian subsidiaries filed an application the same day in Canada seeking protection under the provisions of the Companies' Creditors Arrangement Act.
Barzel has operational hubs in Mississauga, Ont., and Montreal, Que., and operates a network of 16 pipe and tube manufacturing, processing and distribution facilities. Lakeside Steel believes there is a very strong strategic fit between the two companies' respective businesses that could be realized through the acquisition of certain of Barzel's assets or, potentially, Barzel's entire business.
Lakeside Steel further believes that the combination of its business with the assets of Barzel would enable substantially increased steel purchasing power, improved operating efficiencies and streamlined logistics. A combined Lakeside Steel and Barzel would create an emerging mid-sized steel pipe, tube and processing company with a poised aggressive merger and acquisition platform.
Lakeside Steel in combination with the whole of Barzel would represent a diversified product mix including pipe and tube manufacturing, slitting, pickling. Combining the two entities would create what management believes is the sixth-largest pipe and tube company in North America.
“Lakeside Steel will pursue those select mergers and acquisitions that allow us to grow our business profitably,” said Ron Bedard, President and Chief Operating Officer of Lakeside Steel. “Acquiring Barzel or certain assets from Barzel would clearly fit with this goal and would position Lakeside Steel to become an even stronger pipe and tube manufacturer as economic conditions improve.’
The company said its management team and board of directors are committed to growing its business both organically and through accretive mergers and acquisitions. Lakeside Steel believes it has sufficient financing in place to complete a responsible acquisition of assets of Barzel.
Headquartered in Norwood, Mass., Barzel serves a variety of industries, from construction and industrial manufacturing to transportation, infrastructure development and mining.
Located in Welland, Ont., Lakeside Steel is a diversified steel pipe and tubing manufacturer with a range of customers including large oil and gas, mining, automotive and commercial and industrial supply companies. Lakeside also manufactures pipe and mechanical tubing for the resale market, which is sold to distributors in Eastern Canada and the Northeastern United States. Products for these industries include oil well tubing and casing, mechanical tubing, pressure tubing, automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside serves customers worldwide, either directly or indirectly, in Canada, Australia and the United States.
