Steel Dynamics Expands SBQ Finishing Capabilities Through US$126M Deal
06/30/2016 - U.S.-based Steel Dynamics Inc. is acquiring America’s largest maker of threaded rod for US$126 million, the company announced on Thursday.
In a statement, Steel Dynamics executives said the acquisition of Vulcan Threaded Products Inc. will expand its special bar quality processing capabilities. Between 1 April 2015 and 31 March 2016, the Birmingham, Ala., processor shipped approximately 89,000 tons of threaded rod, cold-finished bar and heat-treated bar, Steel Dynamics said.
Steel Dynamics chief executive Mark D. Millett said the deal is in keeping with a strategy to pursue higher-margin opportunities downstream. In this case, the addition of Vulcan could help Steel Dynamics better weather market downturns by increasing internal demand for its own mill products.
“As a consumer of special bar quality products currently produced at our Engineered Bar Products Division, Vulcan depicts this model perfectly and fits well within our core operating strengths," Millett said.
Vulcan typically buys about 20,000 tons of engineered bar from Steel Dynamics per year, according to the steelmaker. But based on its current capabilities, that volume could grow to between 30,000 and 50,000 tons over the next year, Steel Dynamics said.
“We are excited to add the quality of Vulcan's brand and products to our portfolio,” Millett said, adding that it has been a customer for more than a decade.
“We are looking forward to welcoming the employees and customers of Vulcan into the Steel Dynamics family,” Millett said.
The cash deal, which includes US$42 million in working capital, is expected to close in August.
Steel Dynamics chief executive Mark D. Millett said the deal is in keeping with a strategy to pursue higher-margin opportunities downstream. In this case, the addition of Vulcan could help Steel Dynamics better weather market downturns by increasing internal demand for its own mill products.
“As a consumer of special bar quality products currently produced at our Engineered Bar Products Division, Vulcan depicts this model perfectly and fits well within our core operating strengths," Millett said.
Vulcan typically buys about 20,000 tons of engineered bar from Steel Dynamics per year, according to the steelmaker. But based on its current capabilities, that volume could grow to between 30,000 and 50,000 tons over the next year, Steel Dynamics said.
“We are excited to add the quality of Vulcan's brand and products to our portfolio,” Millett said, adding that it has been a customer for more than a decade.
“We are looking forward to welcoming the employees and customers of Vulcan into the Steel Dynamics family,” Millett said.
The cash deal, which includes US$42 million in working capital, is expected to close in August.
