Nucor to Acquire David J. Joseph Company
02/11/2008 - Nucor will buy David J. Joseph Co., one of the country’s leading scrap brokers, in a $1.44-billion deal that will boost its total annual scrap processing capacity and provide access to extensive brokerage operations.
Nucor Corp. has signed a Purchase Agreement to acquire the stock of SHV North America, which owns scrap dealer and processor David J. Joseph Co., for approximately $1.44 billion.
Nucor’s acquisition of David J. Joseph will bring a number of benefits, one of the most important being the company’s extensive brokerage operations, which can provide global sourcing of many key steelmaking raw materials.
Nucor will also benefit from David J. Joseph’s scrap processing operations and expertise, as well as its rail services and logistics capabilities, which will allow Nucor to leverage the largest private railcar fleet in North
America dedicated to scrap transportation. The scrap broker’s industrial scrap programs will also provide improved channels for raw materials.
"We are extremely excited to announce the acquisition of a company that has been our partner in growth for the last 38 years," said Daniel R. DiMicco, Nucor’s Chairman, CEO and President. "With its considerable scale and excellent management team, DJJ offers Nucor a large platform for continued growth in this segment of the industry.
David J. Joseph, along with its related affiliates and real estate, will become a wholly owned subsidiary of Nucor, and will maintain its headquarters in Cincinnati, Ohio. The acquisition broadens Nucor's raw materials strategy further into the scrap sector. Nucor expects the acquisition to be accretive in 2008.
“We are very excited that the DJJ leadership team, led by Keith Grass, will continue in their current roles,” commented DiMicco. “The 1700 strong and highly successful members of the DJJ organization have always been part of the Nucor Team but now, more than ever, they will help drive our success from within the Nucor Family."
Nucor—the largest consumer of ferrous scrap in North America—purchased 22.8 million tons of scrap and produced 22.1 million tons of steel in 2007. The acquisition will help Nucor boost its annual scrap processing capacity to 4 million tons, from its current 500,000 tons/year capacity.
The addition of David J. Joseph complements Nucor's overall raw materials strategy, which will ultimately incorporate the annual production of six to seven million tons of high-quality scrap substitutes, such as DRI and pig iron. In December 2006, the Nu-Iron Direct Reduced Iron plant began production in Trinidad. This facility produced over 1.4 million tonnes of high-quality DRI in 2007, all of which was delivered to Nucor steel mills, and will produce 1.8 million tonnes in 2008.
Nucor and affiliates manufacture steel products, with operating facilities primarily in the U.S. and Canada. Products include carbon and alloy steel bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor is the nation's largest recycler.
Headquartered in Cincinnati, The David J. Joseph Co. has five main businesses: Brokerage Services, Scrap Processing, Mill and Industrial Services, Rail Services, and Self Service Auto Parts. In 2007, the company brokered over 20 million tons of ferrous scrap and over 500 million pounds of non-ferrous materials. They will process over 3.5 million tons of ferrous scrap in 2008 utilizing twelve shredders in 35 yards. DJJ also owns over 2000 scrap-related railcars and provides complete fleet management and logistics services to third parties. Founded in 1885, David J. Joseph has been Nucor’s ferrous scrap broker since 1969.
