as·si·du·i·ty

In Apr-96 U.S. cold finished steel bars producer Bliss & Laughlin Industries Inc. (‘B&L’) was acquired by Bar Technologies – controlled by The Blackstone Group (‘Blackstone’) in conjunction with Veritas Capital Inc. (‘Veritas’) – in a public tender offer at US$9.50 per share.

This valued the equity at approximately US$38m. Including US$16.6m in net debt at 30-Sept-95 the total consideration amounted to approximately US$55m.

This implied the following multiples: 32% of sales for the year ended 30-Sep-95 (US$169m, 3.7x net tangible capital turn), 4.8x EBITDA for the year ended 30-Sep-95 (US$11.4m, 6.7% margin), 5.7x EBITA for the year ended 30-Sep-95 (US$9.6m, 5.7% margin), and 1.2x net tangible capital at 30-Sep-95 (US$46m).

B&L was created through a US$20m management buyout in Oct-84 of the Bliss & Laughlin Steel division of diversified manufacturer Axia Inc. (‘Axia’). This MBO was completed at the time of the US$173m buyout of Axia itself, which was sponsored by Merrill Lynch Capital Markets.