BREAKING NEWS

Steel Dynamics to Acquire CSN Heartland Flat Roll Operations

Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced that it has entered into a definitive agreement to acquire Companhia Siderurgica Nacional, LLC ("Heartland") from  CSN Steel, S.L.U., a wholly-owned subsidiary of Companhia Siderurgica Nacional ("CSN").  Located in Terre Haute, Indiana, Heartland produces various types of higher-margin, flat roll steel by further processing hot roll coils into pickle and oil, cold roll, and galvanized products.  Steel Dynamics has agreed to purchase Heartland for $400 million in cash inclusive of $60 million of normalized working capital, subject to customary transaction purchase price adjustments.

Steel Dynamics believes the purchase price approximates current replacement value.  The transaction is expected to be accretive to near-term earnings and cash flow per share.  The acquisition will expand Steel Dynamics' annual flat roll steel shipping capacity to 8.4 million tons and total shipping capability to 12.4 million tons.  The additional exposure to lighter-gauge and greater width flat roll steel offerings will broaden the Company's value-added product portfolio, enhancing Steel Dynamics position as a leading North American steel producer.  

"The acquisition of Heartland represents a step in the continuation of our growth strategy," said Mark D. Millett, Chief Executive Officer. "It levers our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification.  We look forward to welcoming the Heartland employees and customers into the Steel Dynamics family, and working with them to drive future growth and success. 

"We have positioned our capital structure and organizational framework for growth," continued Millett, "and we believe this acquisition will result in numerous future earnings benefits both to Heartland's current operations and to our Midwest flat roll operations.  In combination with our current operations, Heartland brings a tremendous amount of operating flexibility and optionality.  As a part of our broader business platform, Heartland is expected to provide numerous synergies with our existing operations, and we look forward to levering these opportunities in the future."

Heartland Overview
Heartland has the annual capability to produce 1.0 million tons of cold roll steel, with galvanizing capacity of 360,000 tons.  Heartland is comprised of a continuous pickle line, a cold mill, and a galvanizing line.  The equipment has been upgraded, well-maintained, and is in excellent operating condition.  Historically, Heartland has been operated at low utilization, primarily focusing on galvanized products.  Future plans are to utilize the full capacity of the facility, providing high quality cold roll, pickle and oil, and galvanized products.  The geographic proximity to Steel Dynamics' other flat roll operations and certain fabrication locations provides opportunities related to logistics and production efficiencies throughout the supply chain and customer network. 

Transaction Details
The transaction has received all required corporate approvals from the respective parties.  The transaction is only subject to customary conditions and receipt of regulatory approvals.  Steel Dynamics expects to obtain all necessary regulatory approvals and complete the transaction before the end of the third quarter 2018.  The purchase price will be paid in cash from available reserves, and is subject to customary working capital adjustments dependent upon the exact date of closing.   
  
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.  

0 Comments Write your comment

    1. Loading...