Optima Specialty Steel, Inc., a portfolio company of Optima Acquisitions, LLC, and ALJ Regional Holdings, Inc. both announced Monday that they have entered into a definitive merger agreement whereby Optima will acquire 100 percent of KES Acquisition Company dba Kentucky Electric Steel (KES). KES is a value-added manufacturer of Special Bar Quality and Merchant Bar Quality flat steel products. KES has been a supplier to Optima Specialty Steel and contributes to Optima Specialty Steel's long-term strategy alongside its current wholly-owned subsidiaries Niagara LaSalle Corporation and Michigan Seamless Tube, LLC. Niagara LaSalle is a specialty steel processor and is North America's largest independent manufacturer of high quality engineered cold finished steel bars. MST is a specialty steel processor and a leading independent manufacturer of value-added precision-tolerance, cold drawn seamless tubes.
The transaction is subject, among other conditions, to an ALJ shareholder vote, obtaining necessary regulatory approvals and arrangement of financing by Optima. The transaction is expected to close in December 2012.
Additionally, ALJ announced that, in connection with the merger, it is launching a self-tender offer to use approximately 50 percent of its expected cash immediately following closing of the merger to acquire up to approximately 50 percent of its outstanding common stock.