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The Carlyle Group Sells Majority Stake in JMC Steel Group
02/15/2011 - The Carlyle Group and JMC Steel Group have signed a definitive agreement whereby Carlyle will sell its majority stake in JMC to the Zekelman family, which currently owns a minority stake.
Global alternative asset manager The Carlyle Group and JMC Steel Group have signed a definitive agreement whereby Carlyle will sell its majority stake in JMC to the Zekelman family, which currently owns a minority stake. JMC is to put a new capital structure and debt facilities in place that will enhance the company’s growth opportunities, and Carlyle will maintain a minority stake in JMC and participation on the Board of Directors. Financial details were not disclosed.
“Our new ownership and accompanying changes in financial structure will give JMC much more flexibility to make strategic investments,” said JMC Group Executive Chairman Barry M. Zekelman. “I am confident the changes will have a favorable impact on our employees, customers, suppliers and business partners.”
JMC Steel Group will borrow approximately $1.1 billion in order to retire the company’s existing debt and facilitate the transaction.
“The new ownership and capital structure coupled with our strong competitive position and operational capabilities will enhance our growth prospects and provide for an exciting future for JMC Steel, our employees, our customers and our suppliers,” said Frank A. Riddick III, JMC Steel Group CEO.
“I believe strongly in the future of this company, the current management team, and the bright prospects for JMC Steel, which has been my passionate professional focus for 30 years,” said Zekelman. “Frank and I share a vision for JMC Steel. We expect coming years to produce even greater success than we have already achieved,” he said.
The transaction, which is subject to financing, is expected to close by March 31.
JMC Steel Group is the largest independent tubular manufacturer in North America, with the most diverse product platform in the North American pipe and tube industry. Through its Wheatland Tube, Atlas Tube and Picoma product lines, it maintains a leading market position in North America in each of its three core product categories: hollow structural sections (HSS), standard pipe and electrical conduit. Formed in December 2006 through the combination of John Maneely Co. and Atlas Tube and headquartered in Beachwood, Ohio, JMC operates eleven plants in five U.S. states and one Canadian province and has a total production capacity of approximately 2.6 million tons of steel pipe and tube per annum.
The Carlyle Group is a global alternative asset manager with $97.7 billion of assets under management committed to 76 funds as of September 30, 2010. Carlyle invests across three asset classes - private equity, real estate and credit alternatives - in Africa, Asia, Australia, Europe, North America and South America. Since 1987, the firm has invested $64.7 billion of equity in 1015 transactions. The Carlyle Group employs more than 900 people in 19 countries. As of June 30, 2009, in the aggregate, Carlyle portfolio companies have more than $84 billion in revenue and employ more than 398,000 people around the world.
