Steel Dynamics to Acquire The Techs
06/14/2007 - Steel Dynamics enters into a definitive agreement to acquire Pennsylvania-based The Techs, paying $360 million for the company on a cash-free debt-free basis, subject to certain adjustments.
Steel Dynamics, Inc. has entered into a definitive agreement to acquire Pennsylvania-based The Techs, paying $360 million for the company on a cash-free debt-free basis, subject to certain adjustments.
The Techs, a flat-rolled-steel galvanizing company, operates three hot-dip galvanizing facilities in the Pittsburgh, PA, area: GalvTech, MetalTech, and NexTech, each specializing in the galvanizing of specific types of flat-rolled steels. The company specializes in non-automotive applications, serving a variety of customers in the HVAC, commercial construction, and consumer goods markets.
"The Techs represents an excellent opportunity for Steel Dynamics to expand its participation in the value-added steel coating business," said Mark Millett, President and COO for Flat Rolled Steels and Ferrous Resources. "Its management and employees have done a fine job building an outstanding company by focusing on quality and service, resulting in a very loyal non-automotive customer base.
The Techs' three modern, efficient facilities, constructed in 1984, 1990 and 1996, have a combined annual galvanizing capacity of about one million tons. About 85% of the company’s sales are to customers in the eastern U.S. and the Midwest. The privately held company shipped 958,000 tons of galvanized steel in 2006, generating revenues of $811 million.
"This additional business complements our three existing galvanizing lines at Butler and Jeffersonville, Ind., which utilize steel sheet produced at our Butler mill. Like our existing operations, these plants process both hot- rolled and cold-rolled steel in a range of gauges. This acquisition will approximately double SDI's hot-dip galvanizing capacity," Millett said.
Steel Dynamics expects that steel substrate used by The Techs to continue to be supplied by a variety of nearby suppliers. In the past, these suppliers have also included SDI. Together, the three non-union facilities employ approximately 225 people. Steel Dynamics says the three plants will operate under their current management as The Techs, an independent Steel Dynamics business unit reporting to Mr. Millett.
Steel Dynamics’ acquisition of The Techs is expected to close on or about July 2, 2007.
