Algoma Steel & Legato Merger Sign Merger Agreement
The Canadian parent company of privately held Algoma Steel Inc and Legato Merger Corp have entered into a definitive merger agreement that will result in Algoma becoming a publicly listed company with its common shares traded on the Nasdaq Stock Market. Algoma also intends to apply to list its common shares on the Toronto Stock Exchange. As a publicly traded company, Algoma will continue to execute its growth strategies under the leadership of Algoma’s current management, with a Board of Directors that will include six directors designated by Algoma, three directors designated by Legato and one jointly nominated. Algoma CEO Mr Michael McQuade said “The proposed transaction will provide Algoma with investment capital and an enhanced capital structure to support further transformative investments that are expected to drive improved financial performance and sustainable returns through the steel pricing cycle. We continue to evaluate our strategic options, including the potential for a substantial investment in electric arc steel making”.
In addition to the approximately $236 million held in Legato’s trust account, various investors have committed to participate in the transaction through a PIPE of $100 million at $10.00 per share. The PIPE includes significant investments from strategic steel industry participants, as well as investments from Legato’s Chairman, TD Wealth Management, Vantage Asset Management, JC Clark, Hite and Goodwood Fund.
The company currently has a production capacity of about 2.8 million tonnes of steel a year, which makes it the second largest steel company in Canada, and employs roughly 2,700 people.