A.M. Castle sells subsidiary to reduce company debt

OAK BROOK - A.M. Castle & Co. said it has sold subsidiary Total Plastics Inc. to Prophet Equity of Southlake, Texas for approximately $55 million, as part of the company's efforts to reduce its debt.

"The sale of Total Plastics, Inc. represents yet another significant step in our commitment to deliver our balance sheet and improve the capital structure and profitability of our business," said Steven Scheinkman, President and CEO of Castle.

"Our decision to sell Total Plastics, Inc. is the right one for both entities; it allows Castle to focus on our core metals business and Total Plastics, Inc. to pursue its own strategic objectives. We have enjoyed our relationship with Total Plastics, Inc., and we wish its leadership and employees continued success in their future endeavors," he added.

Under the agreement, $1.5 million of the purchase price will be placed into escrow pending adjustment based upon final calculation of the working capital balance at closing, to be determined within approximately 60 days. If the final working capital balance is less than the estimated working capital balance at closing, any shortfall will be deducted from the escrow and any remainder released to the company. If the final working capital balance is greater than the estimated working capital balance at closing, the company will receive the escrowed amount, plus any additional balance due.

"This sale enables Castle to be singularly focused on our metals business and underscores our commitment to making Castle more streamlined and cost effective, so that we can become even more responsive to our customers' needs and position the Company for long-term success," Scheinkman said.

Castle and Total Plastics were advised by William Blair & Company, LLC and Winston & Strawn LLP.