Bayou Steel Corp. agrees to be acquired by capital management firm

New Orleans CityBusiness, Mar 17, 2006 by CityBusiness Staff Report

Steel recycler Bayou Steel Corp. of LaPlace has agreed to be acquired by one of its stockholders, an entity of Black Diamond Capital Management LLC. Based in Lake Forest, Ill., Black Diamond is an alternative asset management firm with more than $8 billion under management.Under the agreement, the Black Diamond entity would acquire all of the outstanding shares of Bayou Steel's common stock.

Bayou Steel's board of directors has been seeking offers for the company over the past several months and decided the Black Diamond agreement would be the best option, Bayou Steel officials said.Subject to adjustments, purchase price for the Bayou Steel shares is expected to be approximately $75 per share, assuming a closing in the quarter ending June 30, 2006.

Bayou Steel believes the transaction with Black Diamond represents a very attractive per share price, said Jerry Pitts, president and CEO of Bayou Steel. The company is committed to remain a strong competitor that will continue to serve our customers, suppliers and employees. We look forward to closing the transaction as soon as the required approvals can be obtained.

LaPlace steel recycler Bayou Steel Corp. emerged from Chapter 11 bankruptcy Feb. 18, 2004 to achieve one of the most profitable periods in the company history with a $64.3 million turnaround from the previous fiscal year. The company reported net income of $29.8 million for fiscal year 2004, the most recent figures available, compared with 2003's net loss of $34.5 million. Revenues increased to $240.8 million in 2004 from $150.3 million the previous year.