Universal Stainless Announces Completion of its Acquisition by Aperam

Rhea-AI Summary

Universal Stainless & Alloy Products has completed its previously announced acquisition by Aperam S.A. in an all-cash transaction valued at $45.00 per share. The acquisition, announced on October 17, 2024, and approved by Universal stockholders on January 15, 2025, combines Aperam's global leadership in stainless and specialty steel solutions with Universal's expertise in specialty steel products for aerospace and industrial applications.

Following the completion, Universal has become a wholly-owned subsidiary of Aperam, and its shares (USAP) have ceased trading on NASDAQ. The merger aims to enhance innovation, deliver sustainable solutions, and accelerate Universal's growth. Aperam views this acquisition as strategic for decommoditizing its product portfolio and strengthening its presence in key industries, particularly aerospace.

Positive

• All-cash acquisition at $45.00 per share provides immediate value to USAP shareholders
• Strategic combination with a global leader enhances market position
• Access to Aperam's strong financial resources for future investments
• Potential for accelerated growth and development
• Enhanced capabilities in high-value specialty products

Negative

• USAP shareholders lose future upside potential as shares cease trading
• Integration risks between two different corporate cultures

Insights

M&A Financial Analyst

The completion of Aperam's acquisition of Universal Stainless at $45.00 per share marks a strategic consolidation in the specialty steel industry, with several key implications for the market and stakeholders:

Strategic Rationale & Synergies:

• The integration combines Universal's specialized aerospace-grade steel manufacturing capabilities in the U.S. with Aperam's global distribution network and sustainable production methods, particularly its unique biomass-based steel production.
• This acquisition significantly enhances Aperam's position in the high-margin aerospace materials sector, while reducing its exposure to commoditized steel products.
• Universal gains access to Aperam's 2.5 million tonnes of stainless steel capacity and advanced R&D capabilities, potentially accelerating product development and market expansion.

Market Impact & Industry Dynamics:

• The deal represents further consolidation in the specialty steel sector, potentially triggering similar strategic moves among competitors seeking to strengthen their high-value product portfolios.
• Universal's delisting from NASDAQ removes one of the few pure-play specialty steel stocks from public markets, limiting investor options in this sector.
• The combination creates a more formidable competitor in the aerospace materials market, potentially challenging established players like Carpenter Technology and Allegheny Technologies.

Operational & Customer Implications:

• Universal's customers, particularly in aerospace and heavy equipment manufacturing, should benefit from enhanced product development capabilities and a more robust supply chain.
• The integration with Aperam's sustainable production methods could provide a competitive advantage as aerospace customers increasingly prioritize environmental considerations in their supply chains.
• The transaction strengthens the combined entity's ability to invest in capacity expansion and technological improvements, particularly important for meeting growing aerospace demand.

Industry Specialist

This acquisition represents a transformative development in the specialty steel industry, with notable technological and competitive implications:

Technological Integration & Innovation:

• The merger combines Universal's expertise in aerospace-grade specialty steels with Aperam's advanced sustainable production technologies, including its innovative FSC-certified forestry-based steel production.
• This unique combination of capabilities positions the merged entity at the forefront of environmentally sustainable high-performance steel production, a growing priority for aerospace and industrial customers.
• The integration enables accelerated innovation in specialty steel development, particularly important for next-generation aerospace applications.

Market Structure Impact:

• The consolidation reduces competition in the U.S. specialty steel market but creates a stronger entity capable of competing more effectively with international players.
• The combined company's enhanced capabilities in sustainable production methods could set new industry standards and influence future regulatory requirements.
• The merger strengthens the Western hemisphere's specialty steel production capabilities, particularly important given growing concerns about supply chain security in critical materials.

BRIDGEVILLE, Pa., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Universal Stainless & Alloy Products, Inc. (“Universal” or the “Company”) today announced the completion of its previously-announced acquisition by Aperam S.A. (the “Acquisition”), pursuant to which Universal stockholders are entitled to receive $45.00 per share of Universal’s common stock in the all-cash transaction.

The combination brings together Aperam, a global leader in stainless, specialty steel solutions, and recycling, with Universal, a leading manufacturer of specialty steel products for key aerospace and industrial applications in the U.S.

The Acquisition was announced on October 17, 2024 and was approved by Universal stockholders at a Special Meeting held on January 15, 2025. With completion of the Acquisition, Universal has become a wholly-owned subsidiary of Aperam and the shares of Universal common stock, previously traded under the symbol USAP, have ceased trading on the NASDAQ Stock Market.

Christopher M. Zimmer, President and CEO of Universal, commented: “We are enormously excited to be part of Aperam, a respected global leader with complementary capabilities and strong financial resources to invest for the future. The transaction represents a significant milestone for both companies, enabling us to work together to innovate and deliver high-quality, sustainable solutions to our customers. The combination also will enable Universal to move forward in accelerating its growth and development with benefits for our employees and customers. We are convinced this transaction represents a powerful combination upon which to build an exciting future together.”

Timoteo Di Maulo, Aperam’s CEO commented: “We are delighted to welcome Universal to the Aperam family. This acquisition is a key step in our strategic plan to decommoditize our product portfolio and provide innovative, high-performance solutions for key industries such as aerospace. Together, we are poised to unlock new opportunities for growth and value creation.”

Advisors

TD Cowen acted as exclusive financial advisor to Universal and K&L Gates LLP served as legal advisor to Universal.

About Universal Stainless & Alloy Products, Inc.

Universal Stainless & Alloy Products, Inc., established in 1994 and headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company’s products are used in a variety of industries, including aerospace, energy, and heavy equipment manufacturing. More information is available at www.univstainless.com.

About Aperam

Aperam is a global player in stainless, electrical, specialty steel and recycling, with customers in over 40 countries. The business is organized in four primary operating segments: Stainless & Electrical Steel, Services & Solutions, Alloys & Specialties and Recycling & Renewables.

Aperam has a flat Stainless and Electrical steel capacity of 2.5 million tonnes in Brazil and Europe and is a leader in high value specialty products. In addition to its industrial network, spread over six production facilities in Brazil, Belgium, and France, Aperam has a highly integrated distribution, processing and services network and a unique capability to produce stainless and special steels from low-cost biomass (charcoal made from its own FSC-certified forestry). More information is available at www.aperam.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words like “may,” “will,” “likely,” “should,” “expect,” “anticipate,” “future,” “plan,” “believe,” “intend,” “goal,” “seek,” “estimate,” “project,” “target,” “continue,” or variations of such words and similar expressions. These forward-looking statements are not guarantees of future performance and involve risks, assumptions, and uncertainties, including, but not limited to, risks related to Aperam’s ability to realize the anticipated benefits of the Acquisition and integrate Universal’s business; the effect of the Acquisition on Universal’s and Aperam’s business relationships, operating results and business generally; significant transaction costs and unknown liabilities; and litigation or regulatory actions related to the Acquisition.  In addition, the risks to which Universal’s business is subject, including those risks set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 29, 2024, and in Universal’s subsequent filings with the SEC, could adversely affect the Transactions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by these forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. The forward-looking statements included in this communication are made only as of the date of this communication, and except as otherwise required by federal securities law, Universal does not assume any obligation nor does it intend to publicly update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

CONTACTS:
Christopher M. Zimmer                                    (412) 257-7604
President and Chief Executive Officer                                

John Arminas                
General Counsel and Corporate Secretary       (412) 220-3774    

FAQ

What is the acquisition price per share for Universal Stainless (USAP)?

Aperam is acquiring Universal Stainless at $45.00 per share in an all-cash transaction.

When did Universal Stainless (USAP) shares stop trading on NASDAQ?

Universal Stainless shares ceased trading on NASDAQ on January 23, 2025, following the completion of the Aperam acquisition.

When did Universal Stainless shareholders approve the Aperam acquisition?

Universal Stainless shareholders approved the acquisition at a Special Meeting held on January 15, 2025.

What are the strategic benefits of Aperam acquiring Universal Stainless?

The acquisition allows Aperam to decommoditize its product portfolio, strengthen its presence in aerospace industry, and combine complementary capabilities while providing Universal access to stronger financial resources for growth.

When was the acquisition of Universal Stainless by Aperam first announced?

The acquisition was first announced on October 17, 2024.