Steel Dynamics and Roanoke Electric Steel Announce Merger Agreement
18 Ottobre 2005 - 4:01PM
PR Newswire (US)
FORT WAYNE, Ind., and ROANOKE, Va., Oct. 18 /PRNewswire-FirstCall/
-- Steel Dynamics, Inc. - (NASDAQ:STLD) ("SDI"), and Roanoke
Electric Steel Corporation (NASDAQ:RESC) ("Roanoke"), have
announced the execution of a definitive agreement of merger (the
"Merger Agreement") pursuant to which SDI will acquire Roanoke.
Pursuant to the Merger Agreement, which has been unanimously
approved by the Roanoke Board of Directors, Roanoke stockholders
will receive a fixed consideration equal to 0.4 shares of SDI
common stock and $9.75 in cash for each share of Roanoke stock
outstanding at the effective time of the merger. At SDI's closing
price of $28.77 on October 17, 2005, the per share consideration to
Roanoke is $21.26, a 13.7% premium to Roanoke's closing price on
the same day. The actual value of the per share consideration to
Roanoke stockholders at the effective time of the merger, however,
will depend on the value of SDI's common stock at the effective
time of the merger. The aggregate consideration includes the
assumption of net debt, which totaled $41 million as of July 31,
2005. Completion of the merger is subject to approval by Roanoke's
stockholders, regulatory approval, including antitrust approval,
and the satisfaction or waiver of customary conditions. The Merger
Agreement contains certain termination rights for both parties and
further provides for a termination fee to SDI of $7.5 million plus
expenses if the transaction is terminated under certain
circumstances. "This combination further diversifies SDI's product
offering, provides additional penetration of the joist, truss and
girder markets and provides SDI with its first foray into the
processed raw materials arena," said Keith Busse, SDI's President
and CEO. "The combination will enable us to broaden our geographic
presence and strengthen our relationships with customers. We plan
to invest $50 - $80 million to improve and upgrade Roanoke's
facilities after the transaction closes." "Steel Dynamics is a
fast-growing, respected leader in the domestic steel industry with
first-rate operations, an outstanding safety record, a diverse
product line and a large customer base," said Donald G. Smith,
Chairman and CEO of Roanoke Electric Steel. "This agreement is the
best fit for our organization and is the best outcome to secure the
long-term success of Roanoke Electric Steel." "The steel industry
is undergoing significant change," added T. Joe Crawford, Roanoke
Electric Steel President and COO. "For us to remain competitive in
the future while building on our 50-year heritage of quality and
service, it's in the best interest of our customers, dedicated
employees, and shareholders to join SDI and its enviable record of
success." Smith, who previously had announced his intentions to
retire from Roanoke Electric Steel in February 2006 after 48 years
of service, will retire upon the closing of the transaction.
Crawford will serve as Vice President and General Manager - Roanoke
Electric Steel Division. Tim Duke will serve as Vice President of
SDI and will remain President of Steel of West Virginia Inc., which
will be a subsidiary of SDI. Morgan Stanley served as financial
advisor to SDI and Barrett & McNagny and McDermott Will &
Emery provided legal advice. Jefferies & Company served as
financial advisor to Roanoke and McGuireWoods and Woods Rogers
provided legal advice on behalf of Roanoke. Founded in 1993, Steel
Dynamics operates three steelmaking mini-mills, which produce a
wide range of steel products, including flat-rolled products, such
as hot-rolled, cold-rolled and coated steels; wide-flange beams and
H-piling; rail; and special-bar-quality round bars. SDI also
produces joist and decking products for the non-residential
construction markets in two fabrication facilities. Roanoke
Electric Steel Corporation has steel manufacturing facilities in
Roanoke, Virginia and Huntington, West Virginia, producing angles,
rounds, flats, channels, beams, special sections and billets, which
are sold to steel service centers, fabricators, original equipment
manufacturers and other steel producers. Four subsidiaries are
involved in various steel-related activities, consisting of scrap
processing and bar joists and truck trailer beam fabrication. The
merger will increase SDI's total steel making capability to
approximately 5.2 million tons. Steel Dynamics has previously
scheduled a conference call and webcast for October 20, 2005, at 11
a.m. Eastern time with respect to its third quarter results.
Immediately following SDI's Q3 earnings call, the management teams
from both SDI and Roanoke will host a discussion of the proposed
merger. The call can be accessed at (719) 457-2728 with conference
call ID #4943926. A live webcast of the call will also be provided
at http://www.steeldynamics.com/ . For those unable to listen to
the live conference call, a webcast archive will also be available
on Steel Dynamics' website. Steel Dynamics intends to file a
registration statement on Form S-4, and Steel Dynamics and Roanoke
intend to file a related proxy statement/prospectus, in connection
with the merger transaction involving Steel Dynamics and Roanoke.
Investors and security holders are urged to read the registration
statement on Form S-4 and the related proxy statement/prospectus
when they become available because they will contain important
information about the merger transaction. Investors and security
holders may obtain free copies of these documents (when they are
available) and other documents filed with the SEC at the SEC's web
site at http://www.sec.gov/. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC
by Steel Dynamics by contacting Steel Dynamics Investor Relations
at (260) 459-3553. Investors and security holders may obtain free
copies of the documents filed with the SEC by Roanoke by contacting
Roanoke Investor Relations at (540) 342-1831. Roanoke, Steel
Dynamics and their directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
stockholders of Roanoke in connection with the merger transaction.
Information regarding the special interests of these directors and
executive officers in the merger transaction will be included in
the registration statement of Steel Dynamics and proxy
statement/prospectus of Steel Dynamics and Roanoke described above.
Additional information regarding the directors and executive
officers of Steel Dynamics is also included in the Steel Dynamics
proxy statement for its 2005 Annual Meeting of Stockholders, which
was filed with the SEC on April 4, 2005. Additional information
regarding the directors and executive officers of Roanoke is also
included in Roanoke's proxy statement for its 2005 Annual Meeting
of Stockholders, which was filed with the SEC on December 21, 2004.
These documents are available free of charge at the SEC's web site
at http://www.sec.gov/ and from Investor Relations at Steel
Dynamics and Roanoke as described above. Forward Looking Statements
This press release contains some predictive statements about future
events, including statements related to conditions in the steel
marketplace and the financial markets. These statements are
intended to be made as "forward-looking," subject to many risks and
uncertainties, within the safe harbor protections of the Private
Securities Litigation Reform Act of 1995. Such predictive
statements are not guarantees of future performance, and actual
results could differ materially from our current expectations. The
company does not assume any obligation to update these statements
in a news release or otherwise should material facts or
circumstances change in ways that would affect their accuracy. We
refer you to SDI's detailed explanation of the many factors and
risks that may cause such predictive statements to turn out
differently, as set forth in its most recent Annual Report on Form
10-K and in other reports which the Company from time to time files
with the Securities and Exchange Commission, available publicly on
the SEC Web site, http://www.sec.gov/ and on the Steel Dynamics Web
site, http://www.steeldynamics.com/ . Overview of Key Statistics
Steel Dynamics Roanoke Electric Steel Year Founded 1993 1955
Headquarters Fort Wayne, IN Roanoke, VA Employees 1,791 1,665 CEO
Keith Busse Donald Smith Products Flat Rolled Steel Merchant Bar
Structural Specialty Shapes SBQ Bar Billets Rail Steel Joists Steel
Joists & Decking Reinforcing Bars Scrap Substitutes End Markets
Automotive Construction Construction Steel Service Centers
Commercial Industries OEM's Transportation Truck Trailer Industrial
Machinery Industrial Lift Trucks Railroad Guardrail Posts
Agricultural Equipment Steel Manufacturing Steel Fabrication Other
Repair and Maintenance Non-residential Contractors Number of
Locations 6 8 Ticker NASDAQ: STLD NASDAQ: RESC Market
Capitalization (As of 10/17/05) $1,239MM $208MM Capacity (MM tons)
4.2 1.0 Revenue(1) $2,352MM $558MM Net Income(1) $308MM $39MM Total
Assets(1) $1,736MM $311MM Note: 1. LTM as of 6/30/05 for Steel
Dynamics and 7/31/05 for Roanoke Electric Steel. DATASOURCE: Steel
Dynamics, Inc.; Roanoke Electric Steel Corporation CONTACT: Keith
Busse, President & CEO of Steel Dynamics, Inc.,
+1-260-459-3553, or fax, +1-260-969-3590; Donald G. Smith, Chairman
and CEO of Roanoke Electric Steel Corporation, +1-540-342-1831, or
fax, +1-540-983-7284 Web site: http://www.steeldynamics.com/
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