Canadian Algoma Steel said in talks he would go public via Legato SPAC
Algoma Steel Inc. of Canada is in talks to make public a merger with Legato Merger Corp., a blank check company, according to people with knowledge of the matter.
A deal is expected to value the combined entity at over $ 1 billion, one of the people said, asking not to be identified in private negotiations. Terms could change and, as with all transactions that are yet to be finalized, talks may fail.
Representatives for Algoma Steel and Legato did not immediately respond to requests for comment.
Algoma, based in Sault Ste. Marie, Ontario, and led by CEO Michael McQuade, is a producer of hot and cold-rolled steel products. The company said its estimated production capacity is around 2.8 million tonnes per year.
In February, Moody’s Investors Service upgraded Algoma’s rating to reflect “improved operational performance and credit metrics due to rising steel prices and the expectation that the company will generate positive free cash flow.” He had previously gone through a restructuring.
Legato, led by a management team including David Sgro, Eric Rosenfeld and Brian Pratt, raised around $ 236 million in an IPO in January. The special-purpose acquisition company said it would focus on finding a target company in industry, renewable energy, infrastructure, engineering or construction.