Bayou Steel Corp., a steel minimill in LaPlace, is emerging from bankruptcy with higher than anticipated revenues. Bayou Steel projected $188 million in revenue for fiscal year 2004 and pulled in $51.7 million during the first quarter ending Dec. 31, 2003. The results are more impressive because the first quarter is usually the company's slowest time, said Richard Gonzalez, Bayou Steel vice president and chief financial officer.
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.
Bayou Steel Corp. reported Friday it made $19.3 million in net income, $9.46 per fully diluted share, for the fiscal year ending Sept. 30, 2005.Overall, our fiscal 2005 performance was solid in spite of a variety of challenges, including higher natural gas and electricity prices and disruptions in production and shipments directly caused by the hurricanes, said Jerry Pitts, president and CEO. Our solid earnings and cash flow performance reflect the continuation of favorable steel market demand, pricing, margins, and improved operating performance. Sales were $271.7 million compared with $240.8 million in 2004. The increase was due to an $83 per ton or a 19-percent increase in selling prices, which was partially offset by a 5.5-percent decrease in shipments.
Steel recycler Bayou Steel Corp. of LaPlace has agreed to be acquired by one of its stockholders, an entity of Black Diamond Capital Management LLC. Based in Lake Forest, Ill., Black Diamond is an alternative asset management firm with more than $8 billion under management.Under the agreement, the Black Diamond entity would acquire all of the outstanding shares of Bayou Steel's common stock. Bayou Steel's board of directors has been seeking offers for the company over the past several months and decided the Black Diamond agreement would be the best option, Bayou Steel officials said.Subject to adjustments, purchase price for the Bayou Steel shares is expected to be approximately $75 per share, assuming a closing in the quarter ending June 30, 2006.
Light steel manufacturer Bayou Steel Corp.'s net income increased 38 percent in 2005, its final year as a public company before Black Diamond Capital Management Firm purchased the company in March. At an estimated buyout price of $160 million, or $78.31 per share, Black Diamond offered the highest return to shareholders, said Bayou Steel president and CEO Jerry Pitts.
LaPlace steel recycler Bayou Steel Corp. emerged from bankruptcy Feb. 18, 2004, and has since had one of the most profitable periods in the company history, achieving a $64.3 million turnaround from its last fiscal year. We are grateful to the many constituencies that continued to support us, especially when conditions were not so positive, said Jerry Pitts, Bayou Steel president and CEO. Given the challenges of the last four years in the steel industry, it is especially pleasing to see the market continue to support healthy margins while demand has softened.
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