Synalloy Corporation (NASDAQ:SYNL) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
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Synalloy Corporation (NASDAQ:SYNL) Files An 8-K Entry into a Material Definitive Agreement

ITEM 1.01 Entry into a Material Definitive Agreement

On February 28, 2017, Bristol Metals, LLC, a Tennessee limited
liability company (Bristol Metals) and a subsidiary of Synalloy
Corporation, a Delaware corporation (Synalloy), entered into
Amendment No. 1 to Asset Purchase Agreement (the Amendment) with
Marcegaglia USA, Inc., a Pennsylvania corporation (MUSA), to
amend the Asset Purchase Agreement between Bristol Metals and
MUSA dated December 9, 2016 (the APA) to include, among other
things, finished goods inventory as part of the purchased assets.
A further description of the Amendment is set forth in Item 2.01
of this Current Report on Form 8-K and is incorporated into this
Item 1.01 by reference.
On February 28, 2017, Bristol Metals entered into a Memorandum of
Understanding (the Assignment) with MUSA and the United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union AFL-CIO, on
behalf of Local Union 5852-22 (the Union). to the Assignment,
MUSA assigned its rights and obligations under the Collective
Bargaining Agreement between MUSA and the Union dated October 1,
2013 (the CBA) to Bristol Metals as a result of Bristol Metals
purchase of MUSAs welded stainless steel pipe and tube operations
in Munhall, Pennsylvania. Additionally, Bristol Metals and the
Union amended the terms of the CBA to include a modest wage
increase and to extend the CBAs termination date to September 30,
2018.
The descriptions of the Amendment and the Assignment contained in
this Current Report on Form 8-K are a summary and are qualified
in their entirety by the terms of the Amendment and the
Assignment. The Company will file the Amendment and the
Assignment with the U.S. Securities and Exchange Commission as an
exhibit to its Annual Report on Form 10-K.
ITEM 2.01 Completion of Acquisition or Disposition of Assets
As previously reported, on December 9, 2016, Bristol Metals
entered into an Asset Purchase Agreement (the APA) with MUSA. On
February 28, 2017, to the terms and conditions of the APA, as
amended by the Amendment, Bristol Metals completed its purchase
of MUSAs welded stainless steel pipe and tube operations in
Munhall, Pennsylvania (the Business). Bristol Metals did not
acquire MUSAs assets relating to its ongoing galvanized and
ornamental tubing operations. At closing, Bristol Metals entered
into a facility lease with MUSA to continue operating the
Business at the Munhall, Pennsylvania facility.
The purchase price for the all-cash acquisition was approximately
$14.95>million. MUSA will also receive quarterly earn-out
payments for a period of four years following closing. Aggregate
earn-out payments will be at least $3 million, with no maximum.
Actual payouts will equate to three percent (3%) of Bristol
Metals incremental revenue, if any, from the amount of small
diameter stainless steel pipe and tube (outside diameter of ten
inches or less) sold.
Synalloy funded the acquisition with a draw against its recently
closed $45 million asset based line of credit with Branch Banking
and Trust Company.
Other than in respect to the transaction discussed above, there
are no material relationships between the parties involved and
the registrant or any of its affiliates, or any director or
officer of the registrant, or any associate of any such director
or officer.
A copy of the press release announcing the closing of this
transaction is attached as Exhibit 99.1 and is incorporated by
reference herein.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number
Description
99.1
Press release issued by Synalloy Corporation on March
1, 2017.


About Synalloy Corporation (NASDAQ:SYNL)

Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.

Synalloy Corporation (NASDAQ:SYNL) Recent Trading Information

Synalloy Corporation (NASDAQ:SYNL) closed its last trading session down -0.18 at 10.18 with 9,223 shares trading hands.