Maverick Tube Corporation Acquires Assets to Enter
Drawn Tubing Market
ST. LOUIS, Aug. 27 /PRNewswire/ -- Maverick Tube Corporation (Nasdaq: MAVK - news) announced today that it has
reached agreement with PMAC, Ltd., of Houston, Texas, to purchase those assets used in the production of cold drawn
tubular products at its facilities in West Mayfield, Pa. The purchase price is approximately $11.4 million and will be funded by
additional borrowings from current lenders.
The facility was originally built and operated by Babcock and Wilcox and was closed during the 1980s. PMAC purchased the
assets from Babcock and Wilcox and began operating the cold drawn tubular assets during 1996. Maverick anticipates
employing approximately 100 people during the first year of operations and plans to upgrade certain assets during the next two
years.
Gregg Eisenberg, Maverick's President and CEO, stated, ''We are very excited about this opportunity and have been studying
the Drawn Over Mandrel (DOM) business for some time. The market for these products has been growing and we believe we
can successfully enter the market given current customer acceptance of our Structural Tubing (HSS) products. We believe that
we can attain market shares for DOM products consistent with our successful entry into the HSS market. If we can achieve
this, DOM products will contribute substantially to Maverick's future earnings. There are several synergies between the
operation we are purchasing and our existing plants. We plan to supply up to 80% of the raw materials for drawing from
production at our current facilities in Arkansas and Texas, providing a nice base load for our facilities there. There are other
good fits between our industrial business and the DOM business as well.''
Eisenberg went on to say, ''We are also pleased with the facility we are acquiring in West Mayfield, Pa. The equipment has
some unique capabilities that we believe we can utilize to produce quality products. In addition, the location is advantageous
relative to market demand and labor availability. The assistance provided by the Commonwealth of Pennsylvania and the
responsiveness of the Governor's Action Team was also significant to us in making our decision to operate these assets in
West Mayfield. We look forward to being an important employer in the area.''
Maverick Tube Corporation is a St. Louis, Mo.-based manufacturer of tubular products used in the energy industry in drilling,
production and surface transportation applications as well as industrial tubing products (HSS and standard pipe) used in
various industrial applications.
SOURCE: Maverick Tube Corporation |
