Platinum Equity has agreed to acquire Ryerson Inc. (NYSE: RYI), a Chicago-based metals processor. The total deal is valued at approximately $2 billion, with Ryerson stockholders to receive $34.50 per share. UBS is advising Ryerson on the deal.
RYERSON TO BE ACQUIRED BY PLATINUM EQUITY FOR $34.50 PER SHARE IN CASH
Chicago, IL, July 24, 2007 -Ryerson Inc. (NYSE: RYI) today announced
that it has entered into a definitive merger agreement to be acquired by
Platinum Equity, a leading private equity firm, in a transaction valued
at approximately $2.0 billion. Under the terms of the agreement, an
affiliate of Platinum Equity will acquire all of the outstanding shares
of Ryerson common and convertible preferred stock for $34.50 per share
The cash purchase price per share of $34.50 represents a 15% premium
over Ryerson's closing share price of $30.01 on February 13, 2007, the
day prior to the announcement of the Board's review of strategic
alternatives and a 45% premium over Ryerson's closing share price of
$23.77 on December 13, 2006, the day that Harbinger Capital made a
filing with the Securities and Exchange Commission indicating it was
considering taking a number of actions regarding its investment in
Ryerson. Ryerson's board of directors has unanimously approved the
merger agreement and recommends approval of the transaction by Ryerson's
The merger agreement permits Ryerson, with the assistance of its
advisors, to solicit superior proposals from other parties through
August 18, 2007. There can be no assurances that the solicitation of
proposals will result in an alternative transaction.
Neil Novich, Chairman and Chief Executive Officer of Ryerson, said:
“This transaction is a strong validation of the company's
accomplishments over the years as well as our future growth prospects.
Additionally, Platinum Equity brings the operating expertise and capital
that will allow Ryerson to build upon our successes, execute the
strategic plan and grow the business. “
Tom Gores, Founder and Chairman of Platinum Equity, said: “Ryerson has a
great history and also great potential. It's a good fit for Platinum,
which brings an operational focus that will help the company build value
in the future.”
Jacob Kotzubei, the Platinum Equity executive leading the transaction,
said he expected the public-to-private transition to be seamless.
“Platinum Equity is extremely excited about what the executive
management team and dedicated employees have created at Ryerson. We are
looking forward to working together with the entire team at Ryerson, as
well as its customers and vendors, to create additional value through
Platinum's unique operations-focused approach,” Mr. Kotzubei said.
Ryerson announced on February 14, 2007, that the board of directors had
retained UBS Investment Bank as its financial advisor to assist in
comparing the company's current strategic plan with other alternatives
that may create additional value, including a sale of the company. Over
50 potential acquirers were identified and contacted, including foreign
and domestic mills and service centers, as well as financial buyers.
All interested parties were invited to perform due diligence and were
provided extensive access to company management, financial data and
facilities before submitting proposals. Following a thorough review and
analysis of internal options and external proposals, the board
determined that accepting the Platinum proposal was in the best
interests of stockholders.
The transaction is subject to the approval of Ryerson's stockholders and
customary closing conditions and is expected to be completed by the
fourth quarter of 2007. The transaction is not subject to any financing
condition. Stockholders will be asked to vote on the proposed
transaction at a special meeting that will be held on a date to be
UBS Investment Bank served as Ryerson's financial advisor and Skadden,
Arps, Slate, Meagher & Flom LLP served as legal counsel to Ryerson.