The Canadian parent company of privately held Algoma Steel Inc., an independent steel producer with extensive steelmaking and finishing operations in Sault Ste. Marie, Ontario, Canada, and Legato Merger Corp., a special purpose acquisition company, have entered into a definitive merger agreement that will result in Algoma becoming a publicly listed company with its common shares traded on the Nasdaq Stock Market. Algoma also intends to apply to list its common shares on the Toronto Stock Exchange.

Michael McQuade, CEO of Algoma, commented, “The proposed transaction will provide Algoma with investment capital and an enhanced capital structure to support further transformative investments that are expected to drive improved financial performance and sustainable returns through the steel pricing cycle.”

Eric Rosenfeld, Legato’s chief SPAC officer, said”We believe that Algoma’s transformation and potential investments will allow Legato stockholders to participate in a significant value creation opportunity. We are excited to partner with Algoma’s management team which has an impressive track record of implementing cost savings and operational upgrades over the last few years.” 

“At an implied valuation multiple of 1.9 times calendar year 2021 expected Adjusted EBITDA, we believe that the combined company represents a substantial valuation discount to Algoma’s peer group and a great value for Legato’s stockholders,” said David Sgro, Legato’s chief executive officer. 

Paul, Weiss, Rifkind, Wharton & Garrison LLP and Goodmans LLP are acting as legal counsel to Algoma and Jefferies LLC is acting as financial advisor to Algoma. Graubard Miller is acting as legal counsel to Legato and EarlyBirdCapital Inc., BMO Capital Markets and Maison Placements Canada are acting as financial advisors to Legato.