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
Saudi Arabia is reportedly considering to list its state-run oil behemoth Saudi Aramco in New York Stock Exchange. According to a WSJ report, citing people familiar with the matter, Aramco prefers to float its shares on the NYSE, or in London or Toronto after discussion to list on an Asian stock exchange... Anglo-Australian mining giant BHP Billiton plc reported Tuesday a profit in its first half, compared to last year's hefty loss on sharply lower one charges. Underlying EBITDA, a key earnings metric, climbed 65 percent with higher production and prices. The company further lifted its dividend by 150 percent. Shares of HSBC Holdings Plc declined around 4 percent in Hong Kong trading after the Asia-focused lender reported wider net loss in its fourth quarter amid weak net interest income. Further, the company maintained its dividend, and said its Board plans a further $1.0 billion share buy-back, which is expected to complete in the first half of 2017.
comments powered by Disqus
Follow RTT