Lisle, Ill.-based Ipsco said it will pay $66 a share for NS, a 43% premium to Friday's closing prices.
The acquisition of Newport, Ky.-based NS will strengthen Ipsco's position as a leading North American producer of tubular products for the energy sector, while also maintaining its position as the leading North American supplier of steel plate products. The transaction strategically joins complementary product lines and broadens Ipsco's energy product offering by adding NS Group's highly attractive businesses, including seamless pipe and premium oilfield services provided by Ultra, NS Group's recent acquisition. Following the transaction, Ipsco is expected to have annual revenue exceeding $4 billion.
Ipsco will finance the acquisition through a combination of cash on hand and debt obtained under a fully committed bank credit facility.
The transaction is expected to be accretive to Ipsco's 2007 earnings per share before giving effect to synergies. In addition, it is estimated that the transaction will generate more than $50 million in annual pretax operating synergies, which are anticipated to be fully realized within three years. The deal is expected to close by year-end.