American Railcar Industries Announces Agreement to Purchase Custom Steel, Inc. from Steel Technologies
March 27 2006 - 7:00AM
Business Wire
American Railcar Industries, Inc. (NASDAQ: ARII) ("ARI") today
announced that the Company has signed a definitive agreement to
acquire the stock of Custom Steel, Inc., a subsidiary of Steel
Technologies Inc. (NASDAQ/NM: STTX). Custom Steel operates a
facility located adjacent to ARI's component manufacturing facility
in Kennett, Missouri that produces value-added fabricated parts
that primarily support ARI's railcar manufacturing operations. The
purchase price is approximately $13 million plus approximately $5
million for inventories. Subject to customary closing conditions,
the transaction is expected to close on or about April 1, 2006.
James J. Unger, Chief Executive Officer of ARI, said, "Steel
Technologies' Custom Steel Kennett facility is a well-managed
operation that has provided a high level of service and quality
fabricated parts to our railcar manufacturing business. We are
pleased to welcome the employees of the Kennett facility to ARI.
For many years we have been the beneficiary of their good work and
are very pleased to have them join us in manufacturing railcars for
our customers. The addition of this facility to our railcar
manufacturing business increases the percentage of railcar parts
that are manufactured by the Company." About American Railcar
Industries, Inc. American Railcar Industries, Inc. is a leading
North American manufacturer of covered hopper and tank railcars.
ARI also repairs and refurbishes railcars, provides fleet
management services and designs and manufactures certain railcar
and industrial components used in the production of its railcars as
well as railcars and non-railcar industrial products produced by
others. ARI provides its railcar customers with integrated
solutions through a comprehensive set of high quality products and
related services. This press release contains statements relating
to our expected financial performance and/or future business
prospects, events and plans that are "forward-looking statements"
as defined under the Private Securities Litigation Reform Act of
1995. Forward-looking statements represent our estimates and
assumptions only as of the date of this press release. Such
statements include, without limitation, statements regarding the
anticipated closing of our acquisition of Custom Steel and the
estimated amount of the working capital adjustment to the purchase
price of the acquisition. These forward-looking statements are
subject to known and unknown risks and uncertainties that could
cause actual results to differ materially from the results
described in or anticipated by our forward-looking statements. The
acquisition of Custom Steel is subject to customary closing
conditions. We cannot guarantee that the acquisition will close on
schedule, if at all, or that the acquisition will be successful or
otherwise improve our financial performance or future business
prospects. The actual purchase price adjustment will depend on the
amount of Custom Steel's inventories at closing. Other potential
risks and uncertainties that could adversely affect our business
include, among other things: the difficulties of integrating
acquired businesses with our own; the cyclical nature of our
business; adverse economic and market conditions; fluctuating costs
of raw materials, including steel and aluminum, and delays in the
delivery of raw materials; our ability to maintain relationships
with our suppliers of railcar components; our reliance upon a small
number of customers that represent a large percentage of our sales;
the variable purchase patterns of our customers and the timing of
completion, delivery and acceptance of customer orders; the highly
competitive nature of our industry; the risk of lack of acceptance
of our new railcar offerings by our customers; and the additional
risk factors described in our filing with the Securities and
Exchange Commission. We expressly disclaim any duty to provide
updates to any forward-looking statements made in this press
release, whether as a result of new information, future events or
otherwise. More information about American Railcar Industries, Inc.
is available on our website at www.americanrailcar.com.
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