Heat Treat Industry News
June 30, 2009
Sapa Group makes $95 million offer for Indalex
Merged firm would have 21 aluminum extrusion plants in North America
Aluminum products firm Sapa Group plans to buy bankrupt aluminum extruder Indalex in a move that could increase the Scandinavian firm's North American extrusion capacity by as much as 315,000 metric tons annually. The $95 million purchase plan is to be presented to a bankruptcy court judge for approval as lead (or stalking horse) bidder in an early July auction of assets.
Lincolnshire, Ill.-based Indalex, the second largest producer of soft alloy extrusion products in North America, filed for Chapter 11 bankruptcy protection in late March, noting that its aluminum extrusion sales volume was down some 40% since the market's peak in 2006. In 2008, it had reported sales in excess of 200,000 metric tons, worth about $900 million.
Stockholm, Sweden-based Sapa, the largest aluminum profiles producer in the world, is a subsidiary of Oslo, Norway-based Orkla. The extruder seeks to acquire Indalex's 10 active plants and 29 presses in the U.S. and Canada, which "could double Sapa's volume," Jack Miller, president of Sapa's North American profiles business tells the American Metal Market business newspaper.
Sapa's North American extrusion operations are headquartered in Portland, Ore., and have 11 plants in North American making more than 250,000 metric tons of extrusion in 2008, although it says in a statement that it shipments have "been off with the market in 2009." The transaction would allow Sapa to improve its geographical presence in North America, including an introduction into the Canadian region, where it now only has a sales office (in Vancouver). The statement also says Sapa "would be better positioned to service customers through improved painting, anodizing and fabrication capabilities."
In addition, "the combination has a significant potential of realizing cost synergies through plant restructuring and cost improvements in procurement, logistics and shared services," the statement says, adding that "the new company would have the ability to further develop new end use applications in North America."
Tom Stundza -- Purchasing, 6/22/2009 9:57:05 AM EDT
SOURCE: Purchasing.com
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