A.M. Castle & Co. Announces Close of Sale of Total Plastics, Inc.
March 15 2016 - 6:00PM
Business Wire
Company Executes Significant Further Step in
Plan to Reduce Debt and Improve Capital Structure for the
Long-Term
A.M. Castle & Co. (NYSE:CAS) (the “Company” or “Castle”), a
global distributor of specialty metal, value-added services and
supply chain solutions, announced today that it has completed the
sale of its subsidiary, Total Plastics, Inc., to Prophet Equity of
Southlake, Texas for approximately $55.0 million, subject to
customary working capital adjustments. The Company will use the
proceeds of the sale to pay down debt, pursuant to its previously
announced plan to improve its capital structure.
“The sale of Total Plastics, Inc. represents yet another
significant step in our commitment to delever our balance sheet and
improve the capital structure and profitability of our business,”
said Steven Scheinkman, President and CEO of Castle. “Our decision
to sell Total Plastics, Inc. is the right one for both entities; it
allows Castle to focus on our core metals business and Total
Plastics, Inc. to pursue its own strategic objectives. We have
enjoyed our relationship with Total Plastics, Inc., and we wish its
leadership and employees continued success in their future
endeavors.”
Under the terms of the Agreement, $1.5 million of the purchase
price has been placed into escrow pending adjustment based upon
final calculation of the working capital balance at closing, to be
determined within approximately 60 days. If the final working
capital balance is less than the estimated working capital balance
at closing, any shortfall will be deducted from the escrow and any
remainder released to the Company. If the final working capital
balance is greater than the estimated working capital balance at
closing, the Company will receive the escrowed amount, plus any
additional balance due.
Scheinkman concluded, “This sale enables Castle to be singularly
focused on our metals business and underscores our commitment to
making Castle more streamlined and cost effective, so that we can
become even more responsive to our customers’ needs and position
the Company for long-term success.”
Castle and Total Plastics, Inc. were advised by William Blair
& Company, LLC (financial advisor) and Winston & Strawn LLP
(legal advisor).
About A. M. Castle & Co.
Founded in 1890, A. M. Castle & Co. is a global distributor
of specialty metal and supply chain services, principally serving
the producer durable equipment, oil and gas, commercial aircraft,
heavy equipment, industrial goods, construction equipment, and
retail sectors of the global economy. Its customer base includes
many Fortune 500 companies as well as thousands of medium and
smaller-sized firms spread across a variety of industries. Within
its metals business, it specializes in the distribution of alloy
and stainless steels; nickel alloys; aluminum and carbon. Together,
Castle and its affiliated companies operate out of 21 service
centers located throughout North America, Europe and Asia. Its
common stock is traded on the New York Stock Exchange under the
ticker symbol “CAS”.
Cautionary Statements Regarding Forward-Looking
Information
Information provided and statements contained in this release
that are not purely historical are forward-looking statements
within the meaning of Section 27A of the Securities Act, Section
21E of the Securities Exchange Act of 1934, as amended (“Exchange
Act”), and the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements only speak as of the date of this
release and the Company assumes no obligation to update the
information included in this release. Such forward-looking
statements include information concerning our possible or assumed
future results of operations, including descriptions of our
business strategy, and the cost savings and other benefits that we
expect to achieve from our facility closures and organizational
changes. These statements often include words such as “believe,”
“expect,” “anticipate,” “intend,” “predict,” “plan,” “should,” or
similar expressions. These statements are not guarantees of
performance or results, and they involve risks, uncertainties, and
assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, there are many
factors that could affect our actual financial results or results
of operations and could cause actual results to differ materially
from those in the forward-looking statements, including our ability
to effectively manage our operational initiatives and restructuring
activities, the impact of volatility of metals and plastics prices,
the cyclical and seasonal aspects of our business, our ability to
effectively manage inventory levels, our ability to successfully
complete our strategic refinancing process, and the impact of our
substantial level of indebtedness, as well as including those risk
factors identified in Item 1A “Risk Factors” of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2015. All
future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to above. Except as
required by the federal securities laws, we do not have any
obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in
the future, to reflect the occurrence of unanticipated events or
for any other reason.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160315006827/en/
-At ALPHA IR-Analyst ContactMonica Gupta or Nick
Hughes(312) 445-2870Email: CAS@alpha-ir.comTraded: NYSE (CAS)