Optima Specialty Steel Inc. agreed to buy a subsidiary of ALJ Regional Holdings Inc. (Pink Sheets: ALJJ) that owns and operates a steel mill for $112.5 million in cash.
The target, KES Acquisition Co., is located near Ashland, Ky. and does business as Kentucky Electric Steel.
Following the repayment of all of KES’ outstanding debt and preferred stock, as well as the transaction expenses related to the merger, ALJ is expected to have roughly $51 million in cash.
Optima is a unit of Optima Acquisitions LLC, a Miami-based investment firm with assets in steel, ferroalloys, mining, and real estate.
ALJ tapped investment banks Houlihan Lokey and Roth Capital Partners LLC to manage the sale process. Law firm Morrison & Foerster LLP provided legal counsel. Optima hired Jefferies & Co. Inc. and Baker & McKenzie for financial and legal services, respectively.