MUSCLE SHOALS, Ala., Oct. 3, 2014 /PRNewswire/ -- Wise Metals, the world's third largest producer of aluminum can stock for the beverage industry, today announced it has been acquired by Dutch aluminum rolled products maker Constellium (NYSE: CSTM) for $1.4 billion.
"I'm extremely proud of what we have built at Wise over the last 15 years. Our people, machinery and culture are world class. I'm excited that we have a new steward for Wise who shares our views and has the technological and financial ability to take Wise to the next level," said David F. D'Addario, chairman, chief executive officer and majority shareholder of Wise Metals. "I will be watching with excitement as Wise continues to evolve in a profound way into the future."
Constellium plans to invest up to $750 million by 2022 to increase Wise's current hot mill capacity to 1.5 billion pounds from 1 billion pounds and build more than 400 million pounds of dedicated Body-in-White (BiW), or car body, sheet finishing capacity to serve the rapidly growing automotive market. Wise's earnings before interest, tax, depreciation and amortization (EBITDA) are expected to quadruple compared with 2013, once the investments in the facility are completed, driven by the addition of BiW production.
Wise's Muscle Shoals plant, which has the widest hot strip mill in North America, is ideally located to serve major automotive manufacturing facilities in the southeastern U.S. Thanks to the efforts of its 1,250 employees, Wise enjoys a reputation for industry leading product quality and service to its customers. Eighty percent of the can sheet business over next four years is contracted with key, investment grade customers, providing strong cash flow generation to support Wise's continued growth.
"Wise is a natural fit with our business portfolio," said Pierre Vareille, Constellium's chief executive officer. "The combination of their strong operating capabilities with our major position in the BiW and can sheet markets in Europe will create an outstanding platform to serve our customers. With three core businesses -- aerospace, automotive and packaging -- and a more balanced international dimension, Constellium expects to increase its earnings power and create sustainable value for customers and shareholders."
Constellium estimates that the North American market for BiW aluminum rolled products could grow from less than 220 million pounds in 2012 to approximately 4.5 billion pounds by 2025. This transaction is strategically aligned with Constellium's objective of continuing to grow in this high value-added market. Wise's growing can sheet business in the U.S. will supplement Constellium's leading position in Europe.
The transaction is expected to close around the end of the year, subject to regulatory approvals. Bank of America Merrill Lynch and Winston & Strawn advised Wise on the deal, while Constellium used Deutsche Bank and Watchell, Lipton, Rosen & Katz.
About Wise
Based in Muscle Shoals, Alabama, Wise is the world's third largest producer of aluminum can stock for the beverage industry, as well as other commercial products. Wise will generate approximately $1.4 billion of revenue in 2013.
About Constellium
Constellium is a global sector leader that develops innovative, value added aluminum products for a broad scope of markets and applications, including aerospace, automotive and packaging. Constellium generated €3.5 billion of revenue in 2013.
MEDIA CONTACTS:
Alice Clark
Senior Vice President Human Resources
256-386-6320
alice.clark@wisemetals.com
SOURCE Wise Metals
