Insteel Industries To Buy ASW's Prestressed Concrete Strand Business For $36 Mln

(RTTNews) - Insteel Industries Inc. (IIIN) announced that its wholly-owned subsidiary, Insteel Wire Products Company has entered into an Asset Purchase Agreement to acquire substantially all of the assets associated with the prestressed concrete strand business of American Spring Wire Corporation or ASW for a purchase price of approximately $36.0 million, subject to certain post-closing adjustments. The transaction is expected to close on or before August 15, 2014.

ASW is North America's largest manufacturer of valve and commercial quality spring wire. ASW manufactures PC strand at facilities located in Texas and Georgia. For the twelve months ended June 30, 2014, ASW's sales of PC strand were $67.8 million.

As per the terms of the purchase agreement, Insteel will acquire, 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.

Insteel said it 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. The transaction will be funded from cash on hand and borrowings on Insteel's $100.0 million revolving credit facility.