A Spanish stainless steel manufacturer has reached an agreement to acquire Kokomo-based Haynes International Inc.
Madrid-based Acerinox announced Monday morning its wholly-owned subsidiary, North American Stainless, will acquire Haynes in an all-cash deal that values the Kokomo nickel and cobalt high performance alloy manufacturer at $970 million. The deal includes the takeover of Haynes’ debt.
Specifically, North American Stainless will be paying Haynes shareholders $61 per share, a 9% premium from last Friday’s closing price.
The deal is expected to close in the third quarter of 2024, pending regulatory and Haynes shareholder approvals. Haynes’ stock jumped more than 6% to $59.50 during early trading Monday due to the news.
The acquisition comes with a commitment of $200 million in its U.S. operations over the next four years, including $170 million into Haynes’ operations, the “vast majority” of which will go toward the company’s Kokomo operations, according to Haynes President and CEO Michael Shor.
“We are excited to announce this combination and are confident that this is the right step to ensure the long-term success of Haynes, while maximizing value for our stockholders,” Shor said in a prepared statement.
For Acerinox, company officials said Monday during a webcast the acquisition is a “strategic investment” that will further allow the company to enter the high performance alloy, specialty stainless steel and aerospace markets.
“This expands our already strong presence in the U.S. market and increases our exposure to the aerospace network, creating a very solid growth platform,” Carlos Ortega, chairman of the board of Acerinox, said. “We expect a very strong financial performance with Haynes going forward.”
The company said it will continue the Haynes legacy of investment and support of the Kokomo community. Haynes was started in 1912 in Kokomo by Elwood Haynes.
“Of course, we’ll continue to support our people and the local communities,” Bernardo Velázquez Herreros, Acerinox CEO, said.
Velázquez Herreros said his company’s investment in Haynes will include modernization of equipment and an increase in capacity.
“I think it’s a great combination of two groups that will make something better,” he said. “As we used to say, one plus one is more than two.”
Dave Tocco, United Steelworkers Local 2958 president, said he is optimistic about the acquisition as long as the company keeps true to its investment commitments.
“If everything comes through as it says it’s going to come through, it’ll be a good deal,” he said. “They say things are going to remain as is.”
Tocco said Acerinox has agreed to take over the union’s contract for the remainder of its length. The union last year ratified a new five-year contract that included a 17.5% pay raise over the life of the contract, a $5,000 bonus paid upon ratification, a $1,000 bonus in the contract’s third year, one added floating holiday and paid uniforms for skilled trades.
Acerinox was founded in 1970 and is a manufacturer of stainless steel and high performance alloys, with a melting shop capacity of 3.5 million tonnes. It founded North American Stainless in 1990 to serve as a stainless steel producer for North America. NAS operates a production facility in Ghent, Kentucky.
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