Steel Dynamics Buys Decking Assets from Consolidated Systems.
M2 EQUITYBITES-September 15, 2015-Steel Dynamics Buys Decking Assets from Consolidated Systems
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15 September 2015 - US-based steel producer and metals recycler Steel Dynamics, Inc. (NASDAQ: STLD) has purchased from Consolidated Systems, Inc. certain of its steel decking facilities (including associated assets) and net working capital of approximately USD 30m, for a purchase price of USD 45m in cash, the company said.
The transaction, which is valued below asset replacement cost, is expected to be accretive to 2015 earnings and cash flow per share.
These assets will become a part of Steel Dynamic's fabrication operations through its wholly owned subsidiary, New Millennium Building Systems, LLC.
The purchased assets include three decking facilities located in Memphis, Tennessee; Phoenix, Arizona; andTerrell, Texas.
Producing both standard and premium specialty deck profiles, these assets represented over 8% of 2014 domestic steel decking market share.
Steel Dynamics said that the new locations will allow for enhanced geographic reach into the southwestern and western markets, while the higher-margin specialty deck profiles will further diversify NMBS product offerings.
The production of specialty deck is currently planned to be concentrated in Memphis, where a paint line is already in place. Business and commercial integration with NMBS will begin immediately.
Steel Dynamics posts annual sales of USD 8.8bn in 2014, over 7,400 employees, and manufacturing facilities primarily located throughout the United States (including six steel mills, eight steel coating facilities, an iron production facility, approximately 90 metals recycling locations and six steel fabrication plants).
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|Publication:||M2 EquityBites (EQB)|
|Date:||Sep 15, 2015|
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