AK Steel (AKS)

[Alyssa]

And S&P likes the acquisition too!

Press Release: S&P GRBulletin: AK Steel Corp. Ratings Unaffected By Acq 12:31 PM ET 7/5/17 | Dow Jones

The following is a press release from Standard & Poor's:

NEW YORK (S&P Global Ratings) July 5, 2017--S&P Global Ratings said today that its ratings and outlook on U.S.-based integrated steel producer AK Steel Corp. (B/Positive/--) are not affected by the company's announcement that it will acquire Precision Partners Holding Co. for $360 million. In our view, the acquisition slightly improves AK Steel's product and geographic diversity, but at the same time increases its already high concentration in the automotive market. Nonetheless, we do acknowledge the company's intention to vertically integrate into the automotive hot stamping market, which we believe has experienced capacity constraints since the Great Recession.

We expect AK Steel to finance the acquisition through a combination of debt

(through drawings on its revolving credit facility) and equity. While this would initially lead to a higher adjusted debt balance, we do not expect the acquisition to meaningfully slow the improvement in credit quality over the next 12 months and still expect the company to produce adjusted debt to EBITDA of about 6x by year-end 2017. We expect debt leverage could improve slightly to under 6x in 2018 if automotive demand is broadly steady and margins hold up with average selling prices of about $1,000/ton. We expect the transaction yo close in the second half of 2017, subject to regulatory approval.
constitute a rating action.