Staff Report
Published Aug. 13, 2012

Synalloy Corp. announced today that it has entered into an agreement to acquire Palmer of Texas for $25.57 million, plus working capital and fixed asset adjustments at and after closing.

Palmer of Texas manufactures liquid storage solutions and separation equipment for the petroleum, municipal water, wastewater, chemical and food industries.

Synalloy Corp. produces stainless steel pipe and specialty chemicals, and fabricates stainless and carbon steel piping systems.

Synalloy intends to fund the purchase price through an increase in its existing credit facility and new long-term debt of approximately $22.5 million.

Although Synalloy has obtained a commitment from a bank for this funding, the loan has not yet closed, and closing will be subject to Synalloy completing and finalizing the acquisition.

The transaction is expected to be immediately accretive to Synalloy’s earnings. At Palmer’s current revenue of $32 million for the 12 months ended May 31, Synalloy is projecting a contribution of 30 cents per share to its annual earnings.

The transaction is expected to close by Aug. 25.

“Palmer's business is an excellent complement to Synalloy’s metals unit as we service many of the same markets and have the ability to drive efficiencies in purchasing and operations,” Synalloy President and CEO Craig C. Bram said.

Jim Lee, Palmer’s president since 1989, will continue to run the Palmer operation with his management team. Palmer currently has 137 employees.

In recent years, Palmer’s business has been focused on providing fiberglass and steel tanks to the oil industry.

Synalloy Corp. is traded on the Nasdaq under “SYNL.”