Heat Treat Industry News

December 12, 2007

Evraz to Acquire Claymont Steel

Following its acquisition of Oregon Steel earlier in 2007, Evraz Group SA has announced plans to expand its North American presence with the acquisition of Delaware-based Claymont Steel for approximately $565 million. Upon completion of the transaction, Claymont Steel will become a subsidiary of Evraz. The offer, which is expected to commence during the week of Dec. 17, will be subject to customary conditions, including antitrust clearance.

Evraz Group SA produced 16.1 million metric tons of crude steel in 2006. Claymont Steel manufactures and sells custom discrete steel plate in North America.

Evraz Group S.A. (LSE: EVR) (Evraz) and Titan Acquisition Sub, Inc., a wholly owned subsidiary of Evraz (Titan), today announced that they have entered into a definitive agreement with Claymont Steel Holdings, Inc. (Nasdaq: PLTE) (Claymont Steel) under which Evraz will acquire Claymont Steel for US$23.50 per share, for an aggregate price of approximately US$564.8 million (including debt and net of cash). The offer price of US$23.50 per share represents a premium of 19.1% to Claymont Steel’s three month volume weighted average stock price, a premium of 38.2% to Claymont Steel’s initial public offering price of US$17.00 in December 2006, and a premium of 6.8% to the closing price of Claymont Steel’s stock on Friday, December 7, 2007, of US$22.00. Under the terms of the agreement, Titan will make a cash tender offer for all shares of Claymont Steel common stock and then merge with Claymont Steel. The board of directors of Claymont Steel has unanimously recommended that the shareholders of Claymont Steel accept the offer.

H.I.G. Capital LLC, Inc., which owns approximately 42.6% of Claymont Steel’s issued common stock, has committed to tender its shares in the offer.

The offer, which is expected to commence during the week of December 17, 2007, will be subject to customary conditions, including antitrust clearance, and the acquisition by Evraz of a majority of Claymont Steel’s shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Claymont Steel will become a subsidiary of Evraz. 

ABN AMRO Incorporated is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. Jefferies & Company, Inc. is acting as lead financial advisor to Claymont Steel in the transaction and delivered a fairness opinion to Claymont Steel’s board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Morgan, Lewis & Bockius LLP is acting as legal counsel to Claymont Steel.

Jeff Bradley, Claymont Steel’s Chairman and Chief Executive Officer, said: “We believe that this transaction delivers significant value to our stockholders. We are excited at the opportunity to become part of a company with a significant international presence. As a plate producer, we believe Claymont Steel will be able to contribute to and complement Evraz’s North American operations at Evraz Oregon Steel Mills, Inc. We believe that our customers will also support this deal”.

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