May 11, 2005
Atlas Tube Purchases assets from Maverick Tube

Maverick Tube Corp. signed a letter of intent to sell inventory and customer lists from its hollow structural sections (HSS) product line to Atlas Tube Inc. it said Wednesday.

Ontario, Canada-based Atlas Tube, whose domestic headquarters is in Plymouth, Mich., is the leading HSS producer in North America, Maverick said in a release.

Maverick didn't specify a sale price, but said it will generate between $50 million and $55 million in liquidity when the deal closes, based on the value of inventory and receivables, and premium on the sale of the business.

The company said it also plans to enter into an agreement to continue to produce HSS products for Atlas at Maverick's Hickman, Ark., HSS mill for a period of time. Maverick and Atlas also would be bound by noncompete clauses for some time period.

The HSS product line contributed about $28 million to Maverick's revenue in the quarter ended March 31, the company said. Subject to execution of the agreements, the sale is expected to close before July 1.