May 24 (Reuters) - Canadian steelmaker Algoma Steel is becoming a publicly listed company through a merger agreed with New York-based blank-check firm Legato Merger Corp in a deal that will value the combined company at more than $1 billion.
“Assuming no redemptions by Legato stockholders, the all-stock transaction implies a pro forma enterprise value of more than $1.3 billion at closing and approximately $1.7 billion inclusive of contingent consideration,” Algoma Steel said in a statement on Monday.
The deal is expected to provide Algoma Steel with $306 million of capital, including a $100 million fully committed private placement with key investors, the statement added prn.to/2SsIJnS.
Algoma Steel will become a publicly listed company as a result of the deal, with its shares traded on the Nasdaq stock market. Algoma also intends to apply to list its common shares on the Toronto Stock Exchange, the Canadian steelmaker said.
Special-purpose acquisition companies (SPACs), or blank-check firms, are shell companies that raise funds through an initial public offering to take a private company public through a merger at a later date. (Reporting by Kanishka Singh in Bengaluru; Editing by Muralikumar Anantharaman)