AZZ Inc. (NYSE:AZZ) entered into a definitive agreement to acquire Precoat Metals Corp. from Sequa Corporation for approximately $1.3 billion on March 7, 2022. The purchase price when adjusted for the net present value of approximately $150 million of expected net tax benefits, the net purchase price is approximately $1.13 billion. AZZ expects to fund the transaction with a combination of cash on hand, newly issued debt financing and the issuance of equity or equity-linked securities. Citigroup Global Markets Inc. and Wells Fargo Securities, LLC have committed to provide AZZ with $1,825 million of debt financing, consisting of a senior secured term loan credit facility of $1,525 million and a Revolving Facility of $300 million. As of April 22, 2022, AZZ has obtained financing commitments required to complete the transaction, consisting of a $400 million revolving credit facility, and a $1.525 billion senior secured term loan facility. A proposed $240 million investment by funds managed by Blackstone's (NYSE:BX) Tactical Opportunities business ("Blackstone"), will be used to refinance the AZZ's existing debt structure and to fund the purchase of Sequa's Precoat Metals business division. For the twelve months ended December 31, 2021, Precoat generated revenue of approximately $700 million and adjusted EBITDA of approximately $137 million. Under the transaction, Precoat's employees and management team will be joining AZZ.

The transaction is subject to customary closing conditions, regulatory approvals and the receipt of requisite antitrust approval (or the expiration of the applicable antitrust waiting period). The transaction is expected to close in the first quarter of AZZ's fiscal year 2023. The transaction is anticipated to be immediately and substantially accretive to AZZ's adjusted earnings per share and greater than 20% accretive to adjusted EPS.

Citigroup Global Markets Inc. acted as the financial advisor, and Amar Budarapu of Baker & McKenzie LLP acted as the legal advisor to AZZ. Ernst & Young Capital Advisors, LLC acted as the independent capital advisor to AZZ. Evercore and Barclays acted as the financial advisors, while David Dantzic, Elizabeth More, David Raab, Alan Kimball, David Della Rocca and James Barrett of Latham & Watkins LLP acted as the legal advisors to Sequa Corporation in connection with the transaction. Ernst & Young Capital Advisors, LLC acted as financial advisor to Sequa Corporation. Simpson Thacher represented Blackstone in an investment in AZZ Inc. Simpson Thacher & Bartlett LLP acted as legal advisor to AZZ Inc. The Simpson Thacher team included Anthony Vernace, Michael Chao and Chelsea Penther (M&A); Jonathan Ozner, Lia Toback and Anna Jarman (Capital Markets); Jennifer Nadborny (Public Company Advisory Practice); Jonathan Goldstein, Sophie Staples and Edward Grais (Tax); Matthew Leighton and Javier Rivera-Alvarado (Funds); Brian Gluck (Credit); Jonathan Lindabury, Jennifer Levitt and Mimi Cheng (Derivatives/Backleverage); Greg Grogan and Jeffrey Penn (Executive Compensation & Employee Benefits); Jeanne Annarumma and Alex Kharash (ERISA); Peter Guryan, Kelly Karapetyan and Jamie C. Logie (Antitrust); Lori Lesser, Rachelle Broida and Benjamin Hart (Intellectual Property); and Toby Chun and Deepa Sarkar (Environmental). Barclays Capital Inc. acted as financial advisor to Blackstone's (NYSE:BX).

AZZ Inc. (NYSE:AZZ) completed the acquisition of Precoat Metals Corp. from Sequa Corporation on May 13, 2022. Upon closing, 1,100 employees of Precoat will be joining the AZZ family. AZZ assumed $207.084 million of liabilities of Precoat.