Ternium to Sell Steelscape, Other U.S. Assets to BlueScope Steel
12/20/2007 - Ternium’s IMSA Acero subsidiary enters into stock purchase agreement with BlueScope Steel North America for the sale of IMSA’s interests in Steelscape, ASC Profiles, Varco Pruden Buildings, and Metl-Span LLC.
Ternium SA subsidiary IMSA Acero, SA de CV has entered into a stock purchase agreement with BlueScope Steel North America Corp. for the sale of IMSA’s interests in Steelscape, Inc., ASC Profiles Inc., Varco Pruden Buildings Inc., and Metl-Span LLC.
The transaction values the assets at US$730 million on a cash-free and debt-free basis, subject to working capital and other adjustments. BlueScope Steel will also assume approximately US$20 million in under-funded pension liabilities. Ternium says it intends to use the proceeds of the sale to prepay financial debt.
“By selling the assets that are not a strategic fit with our production system, we seek to enhance our focus on our core businesses in the Americas and reaffirm our commitment to create value through a disciplined approach to expansion that is consistent with our regional strategy,” said Daniel Novegil, Ternium’s CEO.
Ternium will continue to own Steelscape’s Shreveport, La., plant, which has a total annual production capacity of approximately 250,000 tonnes of galvanized steel and 200,000 tonnes of pre-painted steel. Novegil said the company believes the Shreveport facility “can be readily integrated into our operations as we work to achieve the synergies that are expected to result from our integration of Grupo Imsa.”
The assets being sold accounted for annual net sales of approximately US$1.2 billion in 2006. Steelscape, excluding the Shreveport facility, has a total annual production capacity of approximately 450,000 tonnes of galvanized steel and 300,000 tonnes of pre-painted steel. ASC Profiles and Varco Pruden Buildings are in the building components and pre-engineered metal buildings businesses, respectively, while Metl-Span manufactures insulated steel panels.
Ternium also will retain its pre-engineered metal buildings and insulated steel panels businesses in Mexico.
Goldman, Sachs & Co. acted as exclusive financial advisor to Ternium in connection with the transaction. The transaction, which is subject to U.S. antitrust clearance and other customary conditions, is expected to close in the first quarter of 2008.
Ternium is one of the leading steel companies in the Americas, offering a wide range of flat and long steel products. With 25,000 employees and operations in Mexico, Venezuela, and Argentina, Ternium has annual sales of approximately US$10 billion and annual shipments of approximately 12 million tonnes of finished steel products.
BlueScope Steel North America is a subsidiary of BlueScope Steel Limited.
