Canada’s Algoma Steel is in advanced talks to go public through a special purpose acquisition company (SPAC) deal.
Specifically, Algoma Steel is in talks to go public via a merger with Legato Merger, a SPAC or blank check firm. A deal is set to value the combined entity at more than $1 billion U.S.
Algoma, based in Sault Ste. Marie, Ontario, and led by Chief Executive Officer Michael McQuade, is a producer of hot- and cold-rolled steel products. The company has said its estimated production capacity is about 2.8 million tons of steel per year.
In February, Moody’s Investors Service upgraded Algoma’s rating to reflect “an improvement in operating performance and credit metrics due to higher steel prices and the expectation that the company will generate positive free cash flow.”
Legato, led by a management team that includes David Sgro, Eric Rosenfeld and Brian Pratt, raised about $236 million U.S. in a January initial public offering (IPO). The special purpose acquisition company has said that it will focus on finding a target business in the industrial, renewables, infrastructure, engineering or construction industries.
