By Lisa Kerner
Charlotte, N.C., May 16 - OAO Severstal said it agreed to acquire WCI Steel, Inc. for $140 million in total cash, or about $3.29 per share, as part of its "disciplined approach" to growing its U.S. business.
The enterprise value of the transaction, based on outstanding net debt as of April 30, is $327 million, according to a Severstal news release.
Severstal chief operating officer Gregory Mason said the acquisition solidifies Severstal's position as the fourth-largest steel producer in the United States.
WCI Steel said its board of directors recommended the deal to its shareholders.
In addition, holders of a majority of WCI Steel's diluted shares outstanding agreed to the transaction, which also has the full support of the United Steel Workers.
WCI Steel president and chief executive Leonard M. Anthony said in a statement that the decision to sell was made following an evaluation of strategic alternatives and that the sale is in the best interests of WCI Steel shareholders.
The acquisition is expected to close late in the second quarter or early in the third quarter of 2008.
Citi and Raymond James are advising Severstal, while WCI Steel is being advised by Moelis & Co.
WCI Steel, a Warren, Ohio-based producer of value-added, custom steel products, is not currently a public reporting company.
Severstal is a Moscow-based metals and mining company.
| Acquirer: | OAO Severstal
|
| Target: | WCI Steel, Inc.
|
| Announcement date: | May 16
|
| Transaction total: | $327 million
|
| Price per share: | $3.29
|
| Expected closing: | Late in second quarter or early in third quarter of 2008
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