BEACHWOOD, Ohio, Sept. 7 /PRNewswire-FirstCall/ -- Aleris International,
Inc. (NYSE: ARS) announced today that it has entered into a definitive
agreement to purchase 100% of the issued and outstanding stock of ALSCO
Holdings, Inc., the parent company of ALSCO Metals Corporation, for $150
million in cash. ALSCO Metals Corporation, headquartered in Raleigh, North
Carolina, is one of North America's largest suppliers of aluminum building
products. The business had revenues approaching $300 million and operating
income of $23 million for the 12 months ended June 30, 2005. ALSCO has
approximately 615 employees.
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"Today's announcement marks a significant strategic step for Aleris," said
Steve Demetriou, Chairman and Chief Executive Officer of Aleris International,
Inc. "We are focused on profitably growing our core rolling business through
internal improvement initiatives and strategic acquisitions. This acquisition
is an excellent strategic fit that will broaden our customer base and enhance
our ability to meet the needs of our customers."
Aleris expects the acquisition to result in annualized cost synergies of
at least $12 million. "These synergies are anticipated to come from the
consolidation of redundant manufacturing operations, optimizing our scrap
handling and melting capabilities, and other cost-reduction opportunities,"
said Demetriou. "We anticipate capturing the cost synergies over the next 18
months."
Aleris expects the acquisition to be immediately accretive to earnings and
cash flow. The transaction will be funded with cash and borrowings under its
revolving credit facility.
Aleris currently operates three rolling mills, including a direct chill
casting facility in Kentucky and continuous cast facilities in Ohio and
California. Through this acquisition Aleris will add to its portfolio the
ALSCO rolling mill located in Bellwood, Virginia. "The addition of this
rolling mill facility will allow us to expand our spectrum of products and
build upon our rolling, metal sourcing, melting and recycling competencies,"
said John Wasz, President, Aleris Rolled Products Segment.
In addition to the Bellwood rolling facility, Aleris will acquire coating
and fabrication facilities located in Roxboro, North Carolina, Ashville, Ohio
and Beloit, Wisconsin.
Closing of the sale is subject to regulatory approval and is expected
early in the fourth quarter.
Aleris International, Inc. is a global leader in aluminum recycling and
the production of specification alloys and is a major North American
manufacturer of common alloy sheet. The Company is also a leading
manufacturer of value-added zinc products that include zinc oxide, zinc dust
and zinc metal. Headquartered in Beachwood, Ohio, a suburb of Cleveland,
Aleris operates 29 production facilities in the U.S., Brazil, Germany, Mexico
and Wales, and employs approximately 3,400 employees. For more information
about the Company, please visit our Web site at http://www.aleris.com .
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made pursuant to
the safe harbor provision of the Private Securities Litigation Reform Act of
1995. These include statements that contain words such as "believe,"
"expect," "anticipate," "intend," "estimate," "should" and similar expressions
intended to connote future events and circumstances, and include statements
regarding future earnings and earnings per share; future improvements in
margins, processing volumes and pricing; overall 2005 operating performance;
anticipated strengthened automotive volumes; expected cost savings; and
anticipated synergies resulting from the merger. Investors are cautioned that
all forward-looking statements involve risks and uncertainties, and that
actual results could differ materially from those described in the forward-
looking statements. These risks and uncertainties would include, without
limitation, Aleris' ability to effectively integrate the business and
operations of Commonwealth; downturns in automotive production in the U.S. and
Europe, the financial condition of Aleris' customers and future bankruptcies
and defaults by major customers; the availability at favorable cost of
aluminum scrap and other metal supplies that the Company processes; the
ability of the Company to enter into effective metals, natural gas and other
commodity derivatives; future natural gas and other fuel costs of the Company;
a weakening in industrial demand resulting from a decline in U.S. or world
economic conditions caused by terrorist activities or other unanticipated
events; future utilized capacity of the Company's various facilities; future
decreases in recycling outsourcing by primary producers; restrictions on and
future levels and timing of capital expenditures; retention of the Company's
major customers; the timing and amounts of collections; the future mix of
product sales vs. tolling business; currency exchange fluctuations; future
write-downs or impairment charges which may be required because of the
occurrence of some of the uncertainties listed above; and other risks listed
in the Company's filings with the Securities and Exchange Commission,
including but not limited to the Company's quarterly reports on Form 10-Q for
the periods ended March 31, 2005 and June 30, 2005 and its annual report on
Form 10-K for the fiscal year ended December 31, 2004, particularly the
sections entitled "Risk Factors" contained therein.
SOURCE Aleris International, Inc.
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Related links:
http://www.aleris.com
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CONTACT:
Michael D. Friday, Executive Vice President
and Chief Financial Officer of Aleris International, Inc.,
+1-216-910-3503
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