Synalloy closes acquisition Texas-based, Palmer

Synalloy closes acquisition of Texas-based, Palmer

6:29 AM, 24th August 2012
Synalloy closes acquisition of Texas-based, Palmer

SPARTANBURG, US: Synalloy Corporation reported on 13 August, 2012 that it has agreed to purchase stock of Lee-Var Inc, dba Palmer of Texas. On August 21, 2012, the company closed the transaction contemplated by the stock purchase agreement.

In recent years, Palmer’s business has been focused on providing fibreglass (FRP) and steel tanks to the oil industry. Their primary facility in Andrews, Texas, is strategically located in the heart of Permian Basin of West Texas and also serves other liquid rich shale areas including Anadarko Basin, Eagle Ford Shale and Barnett Shale. Palmer also operates a temporary facility on Sabine River in Orange, Texas, where it builds oversized FRP tanks for international customers.

The transaction is expected to be immediately accretive to Synalloy’s earnings. At Palmer’s current level of revenues, Synalloy is projecting a contribution of $0.30 per share to its annual earnings. The acquisition was funded through a credit agreement with its current bank to increase the limit of its line of credit by $5,000,000 to a maximum of $25,000,000 and extended the maturity date to August 21, 2015. The credit agreement also included a ten-year term loan for $22,500,000 that requires equal monthly payments of $187,500 plus interest.

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