Privately held asset management company Black Diamond has signed an agreement to purchase Bayou Steel Corp. in a deal worth $154 million.
Under the terms agreed to by the two companies, current shareholder Black Diamond Capital Management LLC will purchase all outstanding shares of
construction beam and angles producer Bayou Steel at $75 per share. Black Diamond will take over Bayou Steel in the second quarter of 2006, assuming Bayou's $30 million in debt.
Bayou Steel executives are hopeful that Black Diamond, which oversees a portfolio of over $8 million, will invest in its new acquisition with improvements to and expansion of Bayou's current
production capabilities.
President and CEO of Bayou Steel Jerry Pitts commented: "Bayou Steel believes the transaction with Black Diamond represents a very attractive per share price. Black Diamond is a committed strategic partner and this transaction will provide continuity in the present management team as well as a strong, financially sound, independent company that will ensure the cost effective modernization and expansion of our key
production facilities and processes. The company is committed to remain a strong competitor that will continue to serve our customers, suppliers and employees. We look forward to closing the transaction as soon as the required approvals can be obtained."
The deal is subject to regulatory review and approval by Bayou Steel's shareholders.