Ryerson to sell oil, gas assets
Ryerson Inc. today announced the signing of a definitive agreement to sell certain assets related to its U.S. oil and gas, tubular alloy, and bar alloy businesses to Energy Alloys, LLC, a Texas limited liability company. Subject to closing adjustments, the sale price includes $45.5 million of cash, receipt of a $4 million, 3-year note, and the assumption of less than $1 million of liabilities by Energy Alloys. Ryerson expects the transaction to be completed by the end of the first quarter of 2006, subject to customary due diligence and other closing conditions. Ryerson expects to record a pre-tax gain on the sale of approximately $18 million and intends to use the cash proceeds to pay down debt.
The divested operations include three locations dedicated to the oil and gas markets in Oklahoma, Texas, and the Gulf Coast. These operations were acquired with the acquisition of Integris Metals, Inc. in January 2005. The three locations generated revenues of approximately $80 million in 2005 and were profitable. However, Ryerson said that the oil and gas market products are not a strategic fit its core business. The sale will not impact Ryerson's remaining operations in Oklahoma, Texas, and the Gulf Coast region.
It is anticipated that the Ryerson employees at the sold operations will join Energy Alloys.