Insteel Industries, Inc. announced Monday that its wholly-owned subsidiary, Insteel Wire Products Company has entered into an Asset Purchase Agreement to acquire substantially all of the assets associated with the prestressed concrete strand business of American Spring Wire Corporation for a purchase price of approximately $36.0 million, subject to certain post-closing adjustments. The transaction is expected to close on or before August 15, 2014.
ASW is North America's largest manufacturer of valve and commercial quality spring wire. ASW manufactures PC strand at facilities located in Texas and Georgia. For the 12 months ended June 30, 2014, ASW's sales of PC strand were $67.8 million.
Under the terms of the purchase agreement, Insteel will acquire, among other assets, the accounts receivable and inventories related to ASW's PC strand business, the production equipment at ASW's facility in Houston, Texas and the production equipment and facility in Newnan, Georgia. Insteel will lease the Houston facility from ASW. The purchase price is subject to an adjustment to be determined based upon the closing working capital balance. The transaction will be funded from cash on hand and borrowings on Insteel's $100.0 million revolving credit facility.
"The ASW acquisition significantly enhances the footprint of Insteel's PC strand business in our largest and highest growth markets," commented H.O. Woltz III, Insteel president and chief executive officer. "We also believe that the integration of these operations with our existing PC strand facilities in Tennessee and Florida will provide considerable synergy potential through higher productivity levels and improved operating costs."
