logo
Share SHARE
FONT-SIZE Plus   Neg

Synalloy To Buy Palmer Of Texas

Synalloy Corp. (SYNL) said Monday that it has entered into an agreement to buy Palmer of Texas, a manufacturer of liquid storage solutions and separation equipment for the petroleum, municipal water, wastewater, chemical and food industries, in an all cash deal valued at $25.575 million, plus working capital and fixed asset adjustments at and after closing.

Palmer shareholders will also have the ability to receive earn-out payments ranging from $2.5 million to $10.5 million if the business unit achieves targeted levels of EBITDA over a three year period following closing; and Synalloy will have the ability to claw-back portions of the purchase price over a two year period following closing if EBITDA falls below baseline levels.

Synalloy said it plans to fund the purchase price through an increase in its existing credit facility and new long-term debt in the amount of about $22.5 million.

Although Synalloy has obtained a commitment from a bank for this funding, the loan has not yet closed, and closing will be subject to Synalloy completing and finalizing the acquisition of Palmer.

The deal is expected to close by August 25.

Palmer's primary facility is in Andrews, Texas. It also operates a temporary facility on the Sabine River in Orange, Texas, where it builds oversized FRP tanks for international customers. With 137 employees, Palmer generated $32 million in revenues for the trailing twelve months ended May 31, 2012.

Synalloy expects the deal to be immediately accretive to its earnings. At Palmer's current level of revenues, Synalloy is projecting a contribution of $0.30 per share to its annual earnings.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
Ford Motor Co. has announced a safety recall for about 680,000 vehicles, mainly in North America, to fix faulty seat belts that may not hold people in the event of a crash. The recall, primarily for mid-size sedans, includes about 650,000 Ford Fusion vehicles manufactured between 2013 and 2016 and Lincoln MKZ produced between 2013 and 2015. Apple Inc. has confirmed its interest in autonomous vehicle technology, saying it is excited about the potential of automated systems in many areas, including transportation. In a letter to the National Highway Traffic Safety Administration, Steve Kenner, Apple's director of product integrity, said that the tech giant looks forward to collaborating with the regulator and other stakeholders. Japanese electronics maker Panasonic Corp. is in talks to buy Austrian headlight manufacturer ZKW Group GmbH, Nikkei business daily reported Monday, citing a person familiar with the matter. As per the report, both companies could reach a basic agreement as early as this month for a deal that could be worth up to $1 billion.
comments powered by Disqus
Follow RTT