LOS ANGELES--(BUSINESS WIRE)--Reliance Steel & Aluminum Co. (NYSE: RS) (“Reliance”) today announced that it has completed the previously announced acquisition of Metals USA Holdings Corp. (“Metals USA”) for $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 United States to Reliance’s existing operations and complements its existing customer base, product mix and geographic footprint.
The purchase price for Metals USA was $786 million paid in cash at closing for the holders of Metals USA stock, options and restricted stock, and the assumption of $454 million of net debt, representing a Metals USA enterprise value of approximately $1.24 billion. Reliance funded the transaction and refinanced Metals USA indebtedness with a combination of proceeds from its amended $1.5 billion credit facility and new $500 million term loan along with proceeds from its $500 million senior notes offering that was completed last week. Based upon Reliance’s outstanding borrowings as of March 31, 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 (NYSE: APO), which was the majority stockholder of Metals USA.
Further information regarding this transaction will be presented during Reliance’s first quarter 2013 conference call on Thursday, April 25, 2013 at 11:00 a.m. Eastern Time. The call will be broadcast live over the Internet hosted on the Investor Information section of Reliance’s website at www.rsac.com.
About Reliance Steel & Aluminum Co.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, 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 United States, 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.
About Metals USA
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.
Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking” statements, as defined under the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “plans,” “projects,” “believes,” “estimates,” “forecasts” and similar expressions are used to identify these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements concerning the acquisition of Metals USA Holdings Corp. and the performance of the combined company. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements as a result of various important factors, including, but not limited to, those disclosed in Reliance’s reports on file with the Securities and Exchange Commission. As a result, these statements speak only as of the date that they were made, and Reliance undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risks and uncertainties relating to Reliance and its business can be found in Reliance’s Annual Report on Form 10-K for the year ended December 31, 2012.
