In a significant development within the metallurgical industry, Acerinox’s wholly owned U.S. subsidiary, North American Stainless, is set to acquire Haynes International (HAYN), a leading developer, manufacturer, and marketer of technologically advanced high-performance alloys. The all-cash transaction, valued at $798 million, positions Acerinox to fortify its global leadership in the high-performance alloy segment.
Under the definitive agreement, Acerinox will acquire all outstanding shares of Haynes for $61.00 per share in cash, reflecting a premium of approximately 22% to Haynes’s six-month volume-weighted average share price ending February 2, 2024. The enterprise value of the deal stands at approximately $970 million. The transaction has received unanimous approval from the Boards of Directors of both Haynes and Acerinox.
Strategic Benefits for Acerinox:
- Global Leadership: Strengthens Acerinox’s global leadership in the high-performance alloy segment.
- U.S. Market Expansion: Expands Acerinox’s presence in the U.S. market, creating new opportunities in the aerospace sector.
- Strategic Investment: Haynes to reinvest around $200 million over the next four years, particularly in Haynes’s Kokomo operations, to establish an integrated HPA and stainless steel platform.
- Synergies and Growth: Anticipates annual synergies of $71 million, primarily unlocked through the $200 million investment, fostering growth and margin enhancements.
- Complementary Businesses: Creates additional value through the combination of complementary businesses, expanding U.S. operating capabilities and establishing a worldwide sales and distribution network.
- Accelerated Growth: Provides a strong platform to accelerate growth in high-performance alloys and specialty stainless in North America.
- R&D Capabilities: Adds extensive R&D capabilities and a significant patent portfolio, reinforcing Acerinox’s innovation potential.
Haynes’s Perspective:
- Significant Premium: Delivers substantial value to Haynes stockholders, offering a premium of approximately 22% to the six-month volume-weighted average share price.
- Long-Term Success: Ensures the long-term success of Haynes by validating the strength of the business and providing access to Acerinox’s financial strength and expertise.
- Strategic Investment: The $170 million investment in Haynes’ operations supports continued growth in both flat and round products for the global market.
- Enhanced Capacity: Positions Haynes to meet dynamic customer demands by increasing manufacturing capacity and offering more differentiated products, applications, and services with faster lead times.
- Rich Heritage: Merges Haynes’ 112-year-strong foundation and leadership in high-performance alloys with the largest fully integrated stainless-steel company in the U.S.
Regarding the transaction, Noble Capital Markets Senior Research Analyst Mark Reichman stated, “In our opinion, the transaction provides a fair return for Haynes’ shareholders. Additionally, Acerinox has committed to investing $170 million into Haynes’ operations which will support the modernization and growth of the company’s global business in both flat and round products.” Mark initiated research coverage on Haynes International on February 16, 2023.
The information contained in this article, other than Mark’s quote, was derived from the individual press releases issued by the companies involved in this transaction. This press releases can be found here:
https://www.acerinox.com/en/comunicacion/noticias/Acerinox-to-Acquire-Haynes-International/
https://www.haynesintl.com/wp-content/uploads/2024/02/02.05.2024-Transaction-Press-Release.pdf
Haynes International (HAYN) is currently covered by Noble Capital Markets Senior Analyst Mark Reichman. Noble Capital Markets, Inc. is a subsidiary of Noble Financial Group, Inc., the parent company of Channelchek. All equity research on Channelchek is provided by Noble Capital Markets. No part of this article was prepared by Noble’s analysts. Please view Mark’s most recent research report on Haynes International for any applicable disclosures.