Universal Stainless to be acquired by Europe-based Aperam - Recycling Today

Oct 19, 2024

By Brian Taylor, Senior Editor

Bridgeville, Pennsylvania-based Universal Stainless & Alloy Products Inc. has entered into a definitive agreement to be acquired by Aperam in what has been planned as an all-cash transaction.

Aperam is based in Luxembourg and is a global player in stainless, electrical and specialty steel and recycling, with customers in more than 40 countries. The company has six production facilities in Brazil, Belgium and France and shipped 2.2 million metric tons of metal last year.

“Today marks an exciting milestone in Aperam’s journey to become a global supplier in specialty steels," Aperam CEO Timoteo Di Maulo says. "Our combined expertise and resources will allow us to deliver superior solutions that meet the growing demand for high-quality, sustainable solutions. This acquisition not only aligns with our long-term strategy but also strengthens our commitment to decommoditization and increasing exposure to more stable, high-margin industries.”

Universal has recycled-content melt or remelt shops in Bridgeville and North Jackson, Ohio, and shipped about 32,000 tons of metal in 2023.

Following the transaction’s closing, Universal would provide Aperam with its first U.S. manufacturing capability and broaden its geographic presence and product range by expanding its presence in high-growth aerospace and industrial sectors.

The agreement calls for Aperam to acquire all outstanding shares of Universal for $45 per share in cash, which represents a premium of approximately 19 percent to Universal’s three-month volume-weighted average stock price as of Oct. 16 and 10.6 times trailing 12-month adjusted earnings before interest, taxes, depreciation (EBITDA) as of June 30.

“This is an exciting opportunity to become part of a respected leader with complementary capabilities and strong financial resources,” Universal CEO Christopher M. Zimmer says. “It recognizes our substantial accomplishments thus far and it’s a major step forward toward accelerating our growth momentum and development. Importantly, this combination offers tangible benefits to our stockholders, our team and our customers.”

The transaction has been unanimously approved by the boards of directors of each firm. The deal is expected to close in the first quarter of next year, subject to closing conditions and the approval of a majority of voters holding Universal Nasdaq-listed shares.

Following the closing of the transaction, Universal will continue to do business as Universal Stainless and maintain its headquarters in Bridgeville.

Universal’s potential overseas ownership means it will join North American Stainless (NAS) in Kentucky and the Outokumpu mill in Alabama as European-owned producers of recycled-content stainless steel and alloys.

NAS, which operates a large and expanding stainless steel mill in Kentucky, is owned by Spain-based Acerinox, while Outokumpu is a Finland-based firm.