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, the company is expected to have combined annual revenues exceeding $4 billion.
Under the terms of the agreement, approved by both companies' boards of directors, IPSCO will acquire all of the outstanding shares of NS Group for $66.00 per share in cash, for an aggregate price of approximately $1.46 billion, including NS Group's net cash. The share price represents a premium of approximately 43% to NS Group's closing share price on Sept. 8, 2006, and a premium of approximately 33% to its 90-day average trading price. IPSCO will finance the acquisition through a combination of cash on hand and debt obtained under a fully committed bank credit facility.
David Sutherland, IPSCO's president and CEO, said, “This transaction represents a compelling strategic opportunity for IPSCO to become the leading North American supplier to the robust oil and natural gas sector by significantly expanding our pipe product offering and production capacity, as well as our geographic footprint.”
The transaction, which is expected to close by year-end 2006, is subject to approval of NS Group's shareholders and other customary closing conditions, including regulatory approvals.
IPSCO, traded as IPS on both the New York Stock Exchange and Toronto Stock Exchange, operates steel mills at three locations and pipe mills at six locations in the U.S. and Canada. The company's tubular facilities produce a wide range of tubular products, including oil and gas well casing and tubing, line pipe, standard pipe and hollow structurals.
NS Group is a leading producer of tubular products serving the energy industry and certain industrial markets. The company manufactures and markets seamless and welded tubular steel products used in the drilling, exploration and transmission of oil and natural gas and operates a steel manufacturing facility that produces billets as feedstock for its seamless products. Through its acquisition of the Ultra business, NS Group manufactures premium connections for oil and gas drilling and production. NS Group trades on the NYSE under the symbol NSS.