Severstal North America has entered into a definitive agreement to sell certain assets operated under Northern Steel Group, Inc. to an affiliate of Aurora Resurgence, a Los Angeles, Calif. private equity fund.
Under the agreement, Severstal NA would sell Miami Valley Steel Service, Piqua, Ohio; Premier Resource Group, Lombard, Ill.; Electric Coating Technology, East Chicago, Ind.; and U.S. Metals and Supply, St. Louis, Mo. The company said it will use net proceeds from the sale for general corporate purposes.
“The sale of these Northern Steel Group businesses will allow us to more fully focus on our core strategy of building competitive and efficient steelmaking assets in the United States,” said Sergei Kuznetsov, Chief Executive Officer of Severstal North America.
Severstal North America will retain Northern Steel Group’s remaining businesses, which include Independent Steel, Valley City, Ohio, and Sun Steel and Century Steel, both of Chicago Heights, Ill.
Lazard Freres & Co. LLC and Raymond James acted as financial advisors to OAO Severstal. Skadden, Arps, Slate, Meagher & Flom LLP acted as OAO Severstal’s legal advisor.
The transaction is expected to be completed during the second quarter of 2010 pending the expiration or early termination of the waiting period under the Hart-Scott-Rodino Act and other customary closing conditions.
Headquartered in Chicago, Ill., Northern Steel Group is engaged in processing and distributing value-added steel products with about 1.0 million tons of current processing capacity serving more than 1500 customers in the Midwest. The holding company for seven businesses that operate under different names, Northern Steel Group employs 400 people and was acquired by Severstal in August 2008 through its purchase of Esmark.
Severstal North America, part of OAO Severstal international division (Severstal International), is the fourth-largest steelmaker in the United States, specializing in a full range of highest quality light flat rolled products. Fully integrated operations are located in Michigan, Maryland, Ohio and West Virginia, and a new state-of-the-art electric arc furnace operation in Mississippi serves the growing demand for steel in the southeastern United States. Severstal North America also has several joint ventures for high quality coated products.