Pritzker Organization Agrees To Buy TMS International For $1 Bln

(RTTNews) - TMS International Corp. (TMS) and the Pritzker Organization, LLC or TPO Monday announced a definitive merger agreement under which business interests of some members of the Pritzker family would acquire TMS in an all-cash transaction valued at $1 billion, including refinanced third-party debt.

Under the terms of the agreement, TMS stockholders will receive $17.50 in cash for each share of TMS Class A common stock and Class B common stock.

With subsidiaries such as Tube City IMS Corp., TMS is the largest provider of outsourced industrial services to steel mills in North America. It also has a substantial and growing international presence.

TMS provides mill services at 81 customer sites in 12 countries and operates 36 brokerage offices from where it buys and sells raw materials across five continents.

Raymond Kalouche, TMS President and CEO, said, "...With this transaction, we are pleased to be able to maximize stockholder returns while positioning ourselves to continue to deliver exceptional value for our customers and expand our global operations as a privately held company, with TPO as our new long-term partner."

The transaction is expected to close in the fourth quarter. When completed, TMS will become a privately held company and its common stock will no longer trade on the NYSE. The TMS Board of Directors has unanimously approved the definitive merger agreement.

Following the execution of the definitive merger agreement, private equity firm Onex Corp. (OCX.TO) and some of its affiliates, the holders of approximately 60 percent of the outstanding shares of TMS common stock, executed a written consent approving the agreement.

No additional stockholder action is required to adopt or approve the definitive merger agreement. The transaction will be financed through a combination of debt and equity commitments.

Goldman Sachs Bank USA and J.P. Morgan are providing committed debt financing. Committed equity funding is being provided by business interests of Tom Pritzker and Gigi Pritzker.

BofA Merrill Lynch is acting as financial advisor to TMS and Kaye Scholer LLP is advising TMS on legal matters.

Onex said separately that the firm and Onex Partners II would sell their remaining 23.4 million TMS shares for proceeds of $410 million. Onex' portion of these proceeds would be $172 million, including carried interest of $10 million.

TMS closed up 1.4 percent at $15.57 on Friday.