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Reliance Steel & Aluminum Acquires Continental Alloys & Services
08/04/2011 - Reliance Steel & Aluminum has completed its acquisition of the outstanding capital securities of Continental Alloys & Services, Inc., and certain affiliated companies.
Reliance Steel & Aluminum Co. has completed its acquisition of all the outstanding capital securities of Continental Alloys & Services, Inc., and certain affiliated companies, for a transaction value of $415 million, subject to certain adjustments. Other terms of the deal were not disclosed.
Headquartered in Houston, Texas, Continental and its affiliates comprise a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies. The group has 12 locations in seven countries including the United States, Canada, United Kingdom, Singapore, Malaysia, Dubai and Mexico.
“We are very excited to add Continental Alloys & Services to the Reliance family of companies,” said David H. Hannah, Chairman and CEO of Reliance. “Continental has a strong reputation for quality and service to the energy market and complements our existing businesses selling into this high growth market. This acquisition also aligns well with our diversification strategy adding OCTG products, new processing capabilities, and entry into new international markets.
“Continental is a higher-margin business than a general line service center and was valued consistently with our historic approach and falls within an EBITDA range of four to six times based on our estimate of normalized earnings,” added Hannah.
Continental Alloys & Services will operate as a subsidiary of Reliance Steel & Aluminum. Current management will remain in place with Dale Benditz serving as Chief Executive Officer and David Sapunjis serving as President of Continental Alloys & Services.
“We are pleased to join the Reliance network and look forward to the opportunities this will bring to our customers and our employees,” commented Dale Benditz, CEO of Continental Alloys & Services.
Headquartered in Los Angeles, Calif., Reliance Steel & Aluminum is a leading North American service center company. Through a network of more than 200 locations in 38 states and Belgium, Canada, China, Dubai, Malaysia, Mexico, Singapore, South Korea, and the United Kingdom, the company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries.
Founded in 1976, Continental and its affiliates had unaudited combined net sales of about $196 million for the six months ended June 30, 2011.
