Constellium To Buy Alabama-based Wise Metals For $1.4 Bln - Update

(RTTNews) - Aluminium components maker Constellium N.V. (CSTM) Friday said it has signed a definitive agreement to acquire Alabama-based private aluminum sheet producer Wise Metals Intermediate Holdings LLC for $1.4 billion, consisting of $455 million in cash and $945 million in assumption of Wise's existing debt.

The acquisition is expected to immediately add to Constellium 's earnings. The Netherlands-based Constellium said the deal was unanimously approved by its board of directors.

Wise's 2013 EBITDA level is anticipated to quadruple once facility upgrades are completed, driven by the addition of Body-in-White, or BiW production, Constellium said.

Wise, which has the widest hot strip mill in North America, will provide Constellium immediate access to 450 kilo metric tons of hot mill capacity.

Further, Constellium plans to invest up to $750 million by 2022 to increase Wise's current hot mill capacity to over 700 kt and build 200 kt of BiW finishing capacity to serve the rapidly growing automotive market.

Constellium expects the North American market for BiW aluminum rolled products to grow to about 2.000 kt by 2025, from less than 100 kt in 2012.

Pierre Vareille, chief executive officer of Constellium said, "Wise is a natural fit with our business portfolio. The combination of their strong operating capabilities with our major position in the BiW and can sheet markets in Europe will create an outstanding platform to serve our customers."

The firm expects to fund the transaction with a mix of debt and equity to preserve its Constellium's strong capital structure and liquidity. Deutsche Bank has provided a fully committed bridge facility to finance the deal.

Deutsche Bank Securities Inc. is serving as financial advisor to Constellium, and Wachtell, Lipton, Rosen & Katz is serving as its legal advisor.

BofA Merrill Lynch is serving as financial advisor to Wise Metals and Winston & Strawn LLP is serving as its legal advisor.

CSTM closed Thursday's regular trading at $23.32, down 2.55 percent.