Shares of TMS International rose sharply Monday after the Glassport-based parent of Tube City said it will be acquired for about $1 billion in cash and assumed debt by a company controlled by two members of Chicago's wealthy Pritzker family.
The Pritzker Organization said it will pay $17.50 in cash for each TMS share, a 12 percent premium to the closing price Friday.
TMS provides scrap management, logistics, byproducts processing and other services at 81 steel plants in 12 countries. It also operates 36 brokerage offices that buy and sell raw materials. The company employs more than 300 in Western Pennsylvania and more than 4,500 globally.
Last year, TMS reported net income of $26.1 million on revenue of $2.53 billion. It earned $16.2 million on revenue of $1.22 billion in the first half of this year.
In a prepared statement, Pritzker said the company has worked with strong management teams in the past and that it looks forward "to working closely with the TMS management team in a similar fashion to help them build on their impressive track record of success."
Spokespersons for Pritzker and TMS declined to elaborate.
Onex, a Toronto private equity concern, took TMS public in 2011 and continues to own about 60 percent of the company's stock. It supports the sale, which also was approved by the TMS board. No additional stockholder action is necessary to approve the terms offered by Pritzker, TMS said.
The acquisition is subject to review on antitrust grounds. The transaction is expected to be completed in the fourth quarter.
TMS shares closed Monday at $17.48, up $1.91.
TMS becomes the fourth Pittsburgh public company this year that has been or is expected to be taken private by new owners. Warren Buffett's Berkshire Hathaway and 3G Capital acquired H.J. Heinz in June for $28 billion. Cranberry teen clothier rue21 and Moon engineering services provider Michael Baker are expected to be acquired by private equity firms later this year.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.