Corus has announced its intention to acquire 100 per cent of the equity of Precoat, one of the leading independent precoated steel service centres in the United Kingdom.
According to a statement, the recommended cash offer will be 88 pence in cash for each Precoat share, valuing the whole of the issued share capital of Precoat at approximately £7.25 million. The offer represents a premium of approximately 35.4 per cent over the closing price of 65 pence per Precoat share on 5 November 2002 (the last business day prior to the date of the announcement of the offer).
Purchase is conditional upon, amongst others, acceptance by Precoat’s shareholders and regulatory consents. Completion is expected by the end of December 2002.
Following the recent disposal of its Canadian subsidiary – Color Steels Inc. – Precoat has two operating subsidiaries, Color Steels and Europressings.
Color Steels, based in Cross Keys, South Wales, is said to operate one of the leading independent precoated steel service centres in the United Kingdom. Color Steels generated turnover of £44.1 million in the year to 30 April 2002 and a profit before tax of £1.1 million.
Europressings is based in Cardiff, South Wales is the market leader in the United Kingdom in the pressing of precoated blanks into bodies and similar parts for small appliances such as microwaves and for teletronic products. In the year to 30 April 2002, Europressings generated turnover of £9.1 million and a loss before tax of £0.1 million.
Precoat’s operations are said to be complementary to Corus’ existing coated steel service centre operations and it is intended that a new trading business, Corus Colorsteels, will be created within the Corus Metal Services Europe Business Unit. This new trading business will combine Precoat’s Color Steels subsidiary and CMSE’s service centre at Olbury in the West Midlands which specialises in precoated steel.