The plate and sheet producer is being acquired by New York-based Legato Merger Corp., a special purpose acquisition company.

The transaction has an enterprise value of approximately US$1.7 billion and is expected to provide Algoma with US$306 million in capital.

Algoma is to retain its current management, and its new board is to be made up of six directors designated by Algoma, three directors designated by Legato and one jwho will be jointly nominated.

“The proposed transaction will provide Algoma with investment capital and an enhanced capital structure to support further transformative investments that are expected to drive improved financial performance and sustainable returns through the steel pricing cycle,” said Algoma chief executive Michael McQuade.

“We continue to evaluate our strategic options, including the potential for a substantial investment in electric arc steelmaking,” he added.

The company will trade on NASDAQ. It also intends to seek a listing on the Toronto Stock Exchange.