FORT WAYNE, Ind., May 14, 2018 /PRNewswire/ -- 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.
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; (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.