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Black Diamond to Acquire Bayou Steel

Posted on: Tuesday, 21 March 2006, 03:02 CST

By Christopher Faille, Financial Correspondent

LAKE FOREST, IL (HedgeWorld.com) - Black Diamond Capital Management LLC, an alternative asset management firm, has entered into a definitive agreement to acquire all the outstanding shares of Bayou Steel Corp.

Bayou (OTC: BYUA), based in LaPlace, La., was trading at US$45 before this announcement. In a statement issued Friday [March 17] the parties estimated the total per share purchase price for the Bayou shares will be approximately US$75, assuming a closing in the second quarter, as expected. Their price rose to US$70 immediately after the announcement.

There is no financing condition on the transaction, but it is of course conditional upon Bayou Steel shareholder approval and the successful conclusion of the applicable regulatory reviews.

Bayou Steel Corporation makes light structural and merchant bar products in LaPlace, La., and Harriman, Tenn., and operates stocking locations along the inland waterway system near Pittsburgh, Chicago, and Tulsa, Okla.

The statement quoted the chief executive and president of Bayou Steel, Jerry Pitts, expressing his belief that the agreement represents a very attractive per share price. "Black Diamond is a committed strategic partner and this transaction will provide continuity in the present management team as well as a strong, financially sound independent company that will ensure the cost effective modernization and expansion of our key production facilities and processes."

James Zenni and Stephen Deckoff founded Black Diamond in 1995. It now has more than US$8 billion in assets under management in a combination of private equity, hedge funds, and structured vehicles.

Source: Daily News; White Plains

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