FORT WAYNE, Ind., March 1, 2019 /PRNewswire/ -- Steel Dynamics,
Inc. (NASDAQ/GS: STLD) today announced the completion of the
acquisition of a majority of the equity interests of United Steel
Supply, LLC ("United Steel Supply"). United Steel Supply is
headquartered in Austin, Texas and
is a leading distributor of painted Galvalume® flat roll steel
used for roofing and siding applications. Steel Dynamics
purchased 75 percent of the equity interests of United Steel Supply
for $134 million, comprised of cash
consideration of $93 million and the
assumption of $41 million in
apportioned net indebtedness. Additionally, Steel Dynamics
has an option to purchase the remaining 25 percent equity interests
of United Steel Supply in the future.
"We enthusiastically welcome the employees and customers of
United Steel Supply into the Steel Dynamics family," stated
Mark D. Millett, President and Chief
Executive Officer. "This partnership provides an exciting
opportunity to expand our painted Galvalume® distribution
network. We look forward to growing with United Steel Supply
and to providing our high-quality flat roll steel directly to this
important market segment."
United Steel Supply Acquisition Overview
United Steel Supply ("USS") distributes painted and coated flat
roll steel coils to the niche regional roll-former market, serving
the roofing and siding industry. USS is headquartered in
Austin, Texas, with four
distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon, and employs 38 non-union individuals.
As part of the transaction, current United Steel Supply
owners Bret Curtis and Will Waldrip will continue to lead USS in their
current capacities as President and Vice President, respectively.
Under Messrs. Curtis and Waldrip's leadership, United Steel
Supply has achieved an extraordinary 26 percent compounded annual
revenue growth rate since inception in 2007.
Steel Dynamics' unique combination of
Galvalume® manufacturing and on-site paint application
presents attractive synergies in the production of painted
Galvalume®, which is the principal product distributed by United
Steel Supply. Due to the smaller individual order size and
extensive service levels required by USS's large and diverse
customer base, this transaction adds a new, complementary
distribution channel for Steel Dynamics and connects it to a
rapidly growing industry segment with customers that do not
traditionally purchase steel directly from a steel producer.
Steel Dynamics expects this transaction to provide continued growth
in one of its highest-margin flat roll steel products. Steel
Dynamics' Columbus Mississippi and
Butler Indiana Flat Roll divisions already supply flat roll steel
to USS, and this volume is expected to grow.
Transaction Details
The transaction is valued on a total enterprise value based on
five times United Steel Supply's 2018 adjusted EBITDA. The
existing USS owners also have an opportunity to receive an
additional earn-out over a five-year period by achieving certain
operational and financial metrics expected to benefit both United
Steel Supply and Steel Dynamics.
About Steel Dynamics, Inc.
Steel Dynamics is one of the largest domestic steel producers
and metals recyclers in the United States based on estimated
annual steelmaking and metals recycling capability, with facilities
located throughout the United
States, and in Mexico.
Steel Dynamics produces steel products, including hot roll, cold
roll, and coated sheet steel, structural steel beams and shapes,
rail, engineered special-bar-quality steel, cold finished steel,
merchant bar products, specialty steel sections and steel joists
and deck. In addition, the company produces liquid pig iron and
processes and sells ferrous and nonferrous scrap.
Forward-Looking Statements
This press release contains some predictive statements about
future events, including statements related to conditions in the
steel and metallic scrap markets, Steel Dynamics' revenues, costs
of purchased materials, future profitability and earnings, and the
operation of new or existing facilities. These statements, which we
generally precede or accompany by such typical conditional words as
"anticipate", "intend", "believe", "estimate", "plan", "seek",
"project", or "expect", or by the words "may", "will", or "should",
are intended to be made as "forward-looking", subject to many risks
and uncertainties, within the safe harbor protections of the
Private Securities Litigation Reform Act of 1995. These statements
speak only as of this date and are based upon information and
assumptions, which we consider reasonable as of this date,
concerning our businesses and the environments in which they
operate. Such predictive statements are not guarantees of future
performance, and we undertake no duty to update or revise any such
statements. Some factors that could cause such forward-looking
statements to turn out differently than anticipated include:
(1) the effects of uncertain economic conditions;
(2) cyclical and changing industrial demand; (3) changes
in conditions in any of the steel or scrap-consuming sectors of the
economy which affect demand for our products, including the
strength of the non-residential and residential construction,
automotive, manufacturing, appliance, pipe and tube, and other
steel-consuming industries; (4) fluctuation in the cost of key
raw materials and supplies (including steel scrap, iron units, and
energy costs) and our ability to pass on any cost increases; (5)
the impact of domestic and foreign import price competition;
(6) unanticipated difficulties in integrating or starting up
new or acquired businesses or assets; (7) risks and
uncertainties involving product and/or technology development; and
(8) occurrences of unexpected plant outages or equipment
failures.
More specifically, we refer you to Steel Dynamics' more detailed
explanation of these and other factors and risks that may
cause such predictive statements to turn out differently, as set
forth in our most recent Annual Report on Form 10-K under the
headings Special Note Regarding Forward-Looking Statements and Risk
Factors, in our quarterly reports on Form 10-Q or in other
reports which we from time to time file with the Securities and
Exchange Commission. These are available publicly on the SEC
website, www.sec.gov, and on the Steel Dynamics
website, www.steeldynamics.com: Investors: SEC Filings.
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SOURCE Steel Dynamics, Inc.