Alloy Steel International, Inc the manufacturer of Arcoplate and provider of anti-wear and hang-up solutions to the mining and bulk materials industries, based in Perth, Western Australia, and Kostecki Brokerage Pty Ltd (a wholly owned entity owned by the Kostecki family) today announced that they have entered into a definitive merger agreement under which Kostecki Brokerage Pty Ltd (‘KBPL”) will acquire the non-controlling shareholders’ interest in the Company in an all cash transaction. Under the agreement, the Company’s shareholders, excluding the Kostecki family and its affiliated entities, will receive $2.55 per share in cash upon completion of the transaction for a total implied market capitalization of the Company of approximately $40.6 million.
The Special Committee, comprised of independent members of the Board of Directors (the “Board”) of the Company was formed in May 2021 to review the proposal from the Kostecki family and, with the assistance of independent legal and financial advisors, completed a thorough review of the proposal, unanimously concluding that the transaction with the Kostecki family was in the best interests of the Company’s shareholders. Based on the unanimous recommendation of the Special Committee, the agreement was also approved by the full Board.
According to Mr. Steven Kostecki, Director of KBPL, “the Kostecki family, with a 65% majority ownership interest in the Company, believes that the Company can better compete in its markets as a privately held company. The family believes that the cash transaction will provide non-controlling shareholders with certainty of value and liquidity at a fair value which exceeds the Company’s historical trading price.”
According to Mr. Alan Scott, the Company’s Chairman of the Board, and a member of the Special Committee, “we believe that the proposed transaction provides the Company with the opportunity to improve its competitive position as a privately held company and provide liquidity to its minority shareholders, which has been historically lacking.” He added that, “the Special Committee and the Board believe it is a good time to privatize the Company with expected competitive benefits for the business as well as providing a good result for our minority shareholders.”
Jaffe Raitt Heuer & Weiss, P.C. served as legal advisor to the Company. Conner & Winters, LLP served as legal advisor to the Special Committee. Davis Graham & Stubbs LLP served as legal advisor to Kostecki Brokerage Pty Ltd.
ENQUIRIES
Thushara (Sam) Dahanayake
Company Secretary
+61 8 9248 3188
samd@alloysteel.net