April 14, 2006 — Steel Technologies Inc. has signed a binding letter of intent to acquire all the outstanding stock of privately held Kasle Steel Corp. of Dearborn, Mich.

The purchase price is approximately $49 million, subject to closing adjustments, which includes the assumption of approximately $19 million of liabilities. The company expects to finance the transaction with its existing credit facility.

Through its five processing facilities, including three joint ventures, Kasle Steel is North America's largest independent supplier of automotive steel blanks, shipping over 1.5 million tons annually across a variety of platforms. Wholly owned operations include Kasle Steel Auto Blankers, Inc. in Flint, Mich., and Kasle Steel of Canada, Ltd. in Windsor, Ont. The joint venture operations consist of a 50% interest in RSDC of Michigan, LLC in Holt, Mich., a joint venture with Marubeni-Itochu Steel America, Inc.; a 50% interest in Kasle Metal Processing, LLC in Jeffersonville, Ind., a joint venture with Automatic Feed Co.; and a 49% interest in Delaco-Kasle LLC d/b/a Delaco Kasle Processing in Woodhaven, Mich., a certified minority joint venture with Delaco Steel Corp. These operations process material primarily on a toll basis.

"This acquisition will expand Steel Technologies' blanking capabilities considerably and will strengthen our position with key automotive customers,” said Bradford T. Ray, Chairman and CEO of Steel Technologies. “In addition, the combination substantially broadens our processing platform and enhances opportunities to grow with our existing customer base. Upon completion, we expect this acquisition to be immediately accretive to earnings."

Subject to the completion of final due diligence, Steel Technologies expects to complete negotiation of a definitive stock purchase agreement and close the acquisition on or about May 4, 2006.

Steel Technologies processes flat-rolled steel to specific thickness, width, temper, finish and shape requirements for a wide variety of applications. The company has 19 facilities, including its joint venture operations, located throughout the United States and Mexico.