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KOHLBERG & CO. AFFILIATE ACQUIRES MAJORITY INTEREST IN NORTHWESTERN STEEL AND WIRE COMPANY

 KOHLBERG & CO. AFFILIATE ACQUIRES MAJORITY INTEREST
 IN NORTHWESTERN STEEL AND WIRE COMPANY
 STERLING, Ill., Aug. 12 /PRNewswire/ -- Northwestern Steel and Wire Company and Kohlberg & Co. jointly announced today that KNSW Acquisition Company, L.P., an affiliate of Kohlberg & Co., has acquired a majority interest in Northwestern Steel and Wire Company. Kohlberg & Co. is a New York-based merchant banking concern.
 Northwestern is a leading United States producer of structural steel products and fabricated wire products. The company, which has been in continuous operation since 1879, has facilities in Sterling and Rock Falls, Illinois and in Houston.
 As part of a recapitalization of Northwestern, KNSW purchased newly issued shares, representing about 52 percent of the common stock of the company for approximately $35 million. Northwestern's Employee Stock Ownership Plan will continue to own common stock in the company, representing approximately 25 percent of the company's outstanding stock. The balance of the equity will be held or purchased by management and other investors. Proceeds of the equity sale will be used to reduce debt under Northwestern's revolving credit line.
 As part of the recapitalization, Northwestern and the United Steelworkers of America agreed to a new collective bargaining agreement to Aug. 1, 1996. Further, reflecting Northwestern's improved capital structure, the company's existing senior lender group has agreed to amend its credit agreement to provide for reduced amortization requirements and other modifications.
 Robert N. Gurnitz, president and chief executive officer of Northwestern Steel and Wire Company, said, "This is an outstanding transaction for Northwestern Steel and Wire Company and its employee- owners and other investors. We are very pleased to be associated with a highly respected investment group with a long-term perspective. Our company's capital structure will be substantially improved by the reduction of debt."
 "Moreover, our new collective bargaining agreement, coupled with a variety of other measures we have taken at Northwestern, will greatly enhance our position as a low-cost quality producer," he said. "We are extremely well-positioned to continue to grow and to capitalize on the momentum we have in the marketplace."
 James K. Olson, chairman of the company's ESOP Administrative Committee, commented, "We welcome Kohlberg & Co. as a partner. This transaction increases the potential for growth in the value of the stock owned by the employees."
 Kim G. Davis of Kohlberg & Co. said, "We are very pleased with our investment in Northwestern. The company has great potential. Our decision to invest in the company was based significantly on its employee efforts which have enabled it to perform well despite exceptionally difficult conditions in the steel industry. We believe the prospects for Northwestern and its employee-owners and other investors are excellent."
 -0- 8/12/92
 /CONTACT: Leona Richards of Northwestern Steel and Wire, 815-625-2500, ext. 2211, or Susan Loewe of Clark & Weinstock, 212-953-2550, for Northwestern Steel and Wire/ CO: Northwestern Steel and Wire Company; Kohlberg & Co. ST: Illinois, New York IN: MNG SU: TNM


SH-OS -- NY061 -- 6327 08/12/92 16:06 EDT
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Publication:PR Newswire
Date:Aug 12, 1992
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