Reliance Steel Completes Acquisition of Metals USA
04/15/2013 - Reliance Steel & Aluminum Co. has completed the previously announced acquisition of Metals USA Holdings Corp., adding a total of 48 service centers throughout the U.S. to its existing operations.
Reliance Steel & Aluminum Co. has completed the previously announced acquisition of Metals USA Holdings Corp. for US$20.65 per share in cash, pursuant to which Metals USA has become a wholly-owned subsidiary of Reliance. This acquisition adds a total of 48 service centers strategically located throughout the U.S. to Reliance’s existing operations and complements its existing customer base, product mix and geographic footprint.
The purchase price for Metals USA was US$786 million paid in cash at closing for the holders of Metals USA stock, options and restricted stock, and the assumption of US$454 million of net debt, representing a Metals USA enterprise value of approximately US$1.24 billion. Reliance funded the transaction and refinanced Metals USA indebtedness with a combination of proceeds from its amended US$1.5 billion credit facility and new US$500 million term loan along with proceeds from its US$500 million senior notes offering that was completed last week. Based upon Reliance’s outstanding borrowings as of 31 March 2013, Reliance’s net debt-to-total capital ratio, on a pro forma basis giving effect to the acquisition of Metals USA and the financing thereof, would have been approximately 39%.
“We are very pleased to welcome Metals USA to the Reliance family of companies,” said David H. Hannah, chairman and chief executive officer of Reliance. “This transaction is expected to be immediately accretive and we believe that the combined company is well positioned to continue to outperform the broader metals service center industry.”
Effective with the closing, Lourenco Goncalves retired as chairman, president and chief executive officer of Metals USA. Robert C. McPherson III will be promoted to president and chief executive officer of Metals USA. In addition, Roger Krohn will be promoted to senior vice president and chief operating officer of Metals USA.
“We congratulate Reliance on its acquisition of Metals USA. It has been Apollo’s pleasure to work with Metals USA and the management team and we are very proud of what we have been able to collectively accomplish. The sale of Metals USA concludes a successful investment for Apollo,” said M. Ali Rashid, senior partner at Apollo Global Management, which was the majority stockholder of Metals USA.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, Calif., is the largest metals service center company in North America (U.S. and Canada). Through a network of more than 290 locations in 39 states and 10 countries outside of the U.S., Reliance 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.
Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, non-ferrous metals, and building products markets.
