Insteel Wire Products Company, a wholly-owned subsidiary of Insteel Industries, has signed an Asset Purchase Agreement to buy substantially all of the assets associated with the prestressed concrete strand business of American Spring Wire Corporation.
The acquisition is priced at about $36.0 million, subject to certain post-closing adjustments. The transaction is expected to terminate on or before August 15, 2014. ASW is North America's largest manufacturer of valve and commercial quality spring wire. The company produces PC strand at facilities located in Texas and Georgia.
The agreement will see Insteel to buy, among other assets, the accounts receivable and inventories related to ASW's PC strand business, the production equipment at ASW's facility in Houston, Texas and the production equipment and facility in Newnan, Georgia.
Under the agreement, Insteel will lease the Houston facility from ASW. The purchase price is subject to an adjustment to be determined based upon the closing working capital balance.
H.O. Woltz III, Insteel president and chief executive officer, commented "The ASW acquisition significantly enhances the footprint of Insteel's PC strand business in our largest and highest growth markets. We also believe that the integration of these operations with our existing PC strand facilities in Tennessee and Florida will provide considerable synergy potential through higher productivity levels and improved operating costs."