Synalloy Expands Its Specialty Chemicals Segment With the Acquisition of CRI

Synalloy Expands Its Specialty Chemicals Segment With the Acquisition of CRI

SPARTANBURG, S.C., Aug. 29, 2013 (GLOBE NEWSWIRE) -- Synalloy Corporation
(Nasdaq:SYNL), a growth oriented company that engages in a number of diverse
business activities including the production of stainless steel pipe,
fiberglass and steel storage tanks, specialty chemicals and fabrication of
stainless and carbon piping systems, announces the acquisition of the business
assets of Color Resources, LLC ("CRI") and the building and land located in
Fountain Inn, South Carolina where CRI was the sole tenant (the "CRI
Facility"). CRI Tolling, LLC ("CRI Tolling"), a South Carolina limited
liability company and wholly-owned subsidiary of Synalloy, will continue CRI's
business as that of a toll manufacturer that provides outside manufacturing
resources to global and regional chemical companies. CRI Tolling will operate
as a division of Synalloy's Specialty Chemicals Segment, which includes
Manufacturers Chemicals ("MC"). MC is one of the largest custom chemical
formulators and contract manufacturers in the United States. Its principal
products include defoamers, surfactants and lubricants, which are used in
multiple markets including paper, carpet, textile, metal working, household,
industrial and institutional chemicals, petroleum, mining, latex adhesives and
agriculture.

On August 9, 2013, Synalloy closed on the purchase of the CRI Facility. Built
in 1994 specifically for CRI, the plant includes approximately 135,000 square
feet of production, warehouse, laboratory and office space. The purchase price
for the CRI Facility was $3.45 million.

On August 26, 2013, Synalloy acquired certain assets and assumed certain
operating liabilities of CRI through CRI Tolling. The assets purchased from
CRI included equipment and certain other assets and approximately $387,000
worth of inventory and accounts receivables, net of assumed payables.The
total purchase price was $1.1 million.

The Company funded this transaction by entering into a new term loan with
Branch Banking and Trust Company ("BB&T").The term loan is based upon 85% of
the appraised value of the real estate collateral and 75% of the purchase
price of the equipment assets.The term loan has a 10-year maturity and the
monthly payments will be customized to account for a 20-year amortization of
the real estate assets and 5-year amortization of the equipment assets
purchased.The interest rate on the term loan is LIBOR based.In order to
mitigate the variability of the interest rate risk, Synalloy will enter into a
derivative/swap contract with BB&T for the life of the term loan.

As part of the transaction, CRI's President, Tony Jones, has accepted the
position of Vice President of Sales for CRI Tolling.Mr. Jones will report
directly to Greg Gibson, Executive Vice President of Sales and Administration
at MC and CRI Tolling.Kevin Hrebenar, Executive Vice President of Operations
and R&D at MC, will be responsible for these same functions at CRI Tolling.

"A key strategic initiative of our Specialty Chemicals Segment was to acquire
or build a second production facility," said Craig Bram, Synalloy's President
and CEO."MC has experienced continuous growth over the past five years and we
have many opportunities to further penetrate existing markets, as well as
develop new ones, including those in the energy industry.Production capacity
at our Cleveland, Tennessee facility was getting tight and the addition of the
CRI Facility provides ample room to grow.Tony and I had initial discussions
in early 2012 about our respective plans, leading up to more detailed
discussions this year.We believe that CRI will be an excellent fit with MC in
our Specialty Chemicals Segment and are excited to have Tony continue in a
leadership role with CRI Tolling," said Bram.

Synalloy's 8-K/A filing with the Securities and Exchange Commission providing
pro forma financial information on the transaction will reflect a going
concern opinion for CRI plus losses in 2012 in excess of $6.8 million.The
majority of these losses were from goodwill impairment and the write-down of
customer intangibles by CRI's owners in 2012.The one-time charge for the
impairment of goodwill and customer intangible will be eliminated from all
post-acquisition pro forma operating statements of Synalloy and CRI
Tolling.The overall fair value of the assets acquired by Synalloy exceeds the
amount paid to CRI.As a result, due to the bargain purchase accounting rules,
Synalloy will record a one-time pre-tax gain in the third quarter of
2013.Synalloy projects that the addition of CRI Tolling will be slightly
accretive to its earnings in the first year following the transaction.More
importantly, the CRI Facility will provide much needed production capacity to
support further growth of Synalloy's Specialty Chemicals Segment.Over the
next 18 months, Synalloy plans to invest an additional $3.5 million in the CRI
Facility in order to replicate the production capabilities offered at its MC
Cleveland, Tennessee facility.The second plant will also provide current
customers of MC and CRI Tolling with the security of redundant facilities, if
it is ever needed.Synalloy will also move its Spartanburg, South Carolina
corporate offices to the CRI Facility before the end of the first quarter of
2014.

For more information about Synalloy Corporation, please visit our web site at
www.synalloy.com.

Forward-looking Statements

Statements included herein that are not historical in nature, are intended to
be, and are hereby identified as "forward-looking statements" for purposes of
the safe harbor provided by Section 21E of the Securities and Exchange Act of
1934, as amended.These forward-looking statements are based on current
expectations, estimates and projections about our industry, our business, our
customer relationships,management's beliefs and assumptions made by
management. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions that are
difficult to predict and, in many cases, are beyond the control or knowledge
of management. Therefore, actual results may differ materially from those
expressed or forecasted in such forward-looking statements.We undertake no
obligation to publicly update or revise forward-looking statements, whether as
a result of new information, future events or otherwise. Additional
information concerning some of the factors that could cause materially
different results is included in our reports on forms 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission.Such reports are available from
the Securities and Exchange Commission's public reference facilities and its
website, http://www.sec.gov.

CONTACT: Rick Sieradzki at (864) 596-1558
 
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