A.M. Castle completes purchase of Transtar Metals

A.M. Castle & Co., a leading North American distributor of highly engineered metals and plastics, announced September 5 that it completed the acquisition of Transtar Metals, a leading distributor of high-performance alloys to the aerospace and defense industries worldwide. Under the terms of the agreement signed August 12, the closing purchase price was $173.3 million subject to final adjustments, including the assumption of $1.1 million of foreign debt and $0.6 million of capital leases. The purchase was funded with approximately $30 million of available cash and $142 million of debt financing.

Transtar Metals is a leading supplier of high-performance alloys to the aerospace and defense industries, supporting the on-going requirements of those markets with a broad range of inventory, processing and supply chain services. It has six operations strategically located in aerospace hubs in the U.S. and locations in both the United Kingdom and France. Additionally, Transtar maintains a sales presence throughout Europe and the Far East. International sales are over one-third of Transtar's total revenue stream.

Transtar Metals, based in Torrance, Calif., will become a subsidiary of A.M. Castle and operate within the company's metals segment. Transtar will maintain its current management team with Steve Scheinkman, its CEO, assuming the role of Transtar's president. Transtar's headquarters will remain in Torrance.

"We are pleased to welcome Steve and his dedicated team of experts to the Castle family," said Mike Goldberg, CEO of A.M. Castle. "This is a very important acquisition for our company, as it expands our existing business in the high-growth aerospace market. Further, it brings an initial international footprint to our offerings, one that we hope to leverage appropriately over time. I look forward to working closely with the team at Transtar and I am confident that we are committed to a common goal of providing our customers with an exceptional range of specialty offerings."

A.M. Castle financed the acquisition using senior secured credit facilities totaling $210 million, including an expansion of its existing revolving lines of credit from $82 million to $180 million and a $30 million five-year term loan. At closing, the company borrowed approximately $142 million under these facilities.

"We are excited to have completed the acquisition of Transtar Metals and expect it will be accretive to both our top and bottom lines in the first year," said Larry Boik, vice president and CFO of A.M. Castle. "In addition, we feel comfortable with the level of acquisition debt due to the future earnings growth opportunities and our ability to generate strong favorable cash flows from our combined lines of business."