Sep 15 2015
Steel Dynamics, Inc. today announced that it purchased from Consolidated Systems, Inc. ("CSi"), certain of its steel decking facilities (including associated assets) and net working capital of approximately $30 million, for a purchase price of $45 million in cash.
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 ("NMBS").
Mark Millett, President and Chief Executive Officer of Steel Dynamics, said, "Based on our past strategic geographic growth in our fabrication platform, combined with the steadily improving construction sector, our fabrication operations achieved record profitability in the second quarter 2015 and have already surpassed 2014 record setting annual profits. This purchase will further support the success of this platform and create shareholder value. The transaction is a further step in our growth strategy, and will enhance New Millennium's position as a leading North American provider of steel joist and decking, while also providing an accelerated avenue to new steel deck product offerings and additional cold roll and galvanized flat roll steel pull-through volume for our Columbus Flat Roll Division."
"We are excited about the combination of the CSi decking business with New Millennium," stated, Jim Anderson, Chief Operating Officer of NMBS. "CSi is a well-regarded market participant and will provide us with the opportunity for unique product, market and business synergies. We enthusiastically welcome our new CSi employees and customers into our family."
The purchased assets include three decking facilities located in Memphis, Tennessee; Phoenix, Arizona; and Terrell, Texas. Producing both standard and premium specialty deck profiles, these assets represented over 8% of 2014 domestic steel decking market share. 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.
Source: http://www.steeldynamics.com/