Chicago’s Pritzker family, owner of a controlling stake in Hyatt Hotels Corp., agreed to acquire steel mill servicer TMS International Corp. for $690 million in cash.
Pritzker Organization LLC, the family’s investment firm, will pay $17.50 a share for TMS, the companies said today in a joint statement. The price is 12 percent more than Glassport, Pennsylvania-based TMS’s closing price on Aug. 23. TMS’s board unanimously approved the takeover and majority shareholder Onex Corp., a Toronto-based private equity firm, agreed to sell its 60 percent stake to the Pritzkers.
TMS is North America’s largest provider of outsourced services for steel mills with 36 office and 81 customer sites across 12 countries and 36 offices, according to the statement. The company buys and sells raw materials, transports steel products and carries out slag processing and steel surface conditioning.
“TMS is a leading provider of mill, procurement, and logistics services to the steel industry, with an exceptional management team and a proven track record of delivering value to its customers,” Tom Pritzker, chairman and chief executive officer of the Pritzker Organization, said in the statement.
TMS rose 12 percent to $17.48 in New York, the highest price since it began trading publicly two years ago. The Class A shares have gained 40 percent this year. Onex fell 1.4 percent to C$51.10 in Toronto.
The transaction is valued at about $1 billion when refinanced third-party debt is included, according to the statement.
The deal is expected to close in the fourth quarter. The business interests of Tom Pritzker, who also serves as chairman of Hyatt, and Gigi Pritzker, CEO of film-production company Odd Lot Entertainment LLC, are providing equity funding. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are the buyer’s advisers and will provide debt financing for the takeover.
Bank of America Corp. is TMS’s financial adviser and Kaye Scholer LLP is its legal adviser. Latham & Watkins LLP is legal adviser for the Pritzkers.
The value of the offer was calculated based on the 39.4 million Class A and Class B TMS shares that are outstanding, according to data compiled by Bloomberg.