Platinum Equity Acquires Ryerson
Chicago-based Ryerson Inc., under pressure from dissatisfied shareholders, has agreed to be acquired by Platinum Equity, a leading private equity firm, in a $2.0 billion transaction that will take the service center giant private.
Under terms of the agreement, an affiliate of Platinum Equity will acquire all of the outstanding shares of Ryerson common and convertible preferred stock for $34.50 per share in cash. Ryerson’s board has unanimously approved the merger agreement and recommends approval of the transaction by Ryerson’s stockholders.
The purchase price represents a 15 percent premium over Ryerson’s closing share price of $30.01 on Feb. 13, the day before the board announced it was planning to review its strategic alternatives. The figure was a 45 percent premium over Ryerson’s closing share price of $23.77 on Dec. 13, 2006, the day Harbinger Capital made a filing with the Securities and Exchange Commission indicating it was considering action regarding its investment in Ryerson.
The merger agreement permits Ryerson, with the assistance of its advisors, to solicit superior proposals from other parties through Aug. 18. “This transaction is a strong validation of the company’s accomplishments over the years as well as our future growth prospects,” says Neil Novich, chairman and CEO of Ryerson. “Additionally, Platinum Equity brings the operating expertise and capital that will allow Ryerson to build upon our successes, execute the strategic plan and grow the business.”
Platinum Equity entered the metals service center business in 2006, buying the PNA Group, which includes Feralloy, Delta Steel and Infra-Metals. The company added Metal Supply Company later in the year.
“Ryerson has a great history and also great potential. It’s a good fit for Platinum, which brings an operational focus that will help the company build value in the future,” says Tom Gores, founder and chairman of Platinum Equity.
Ryerson officials expect the transaction to be completed in the fourth quarter, after the company’s annual shareholder meeting this month. Harbinger, a minority shareholder, has proposed a slate of seven directors to replace Ryerson’s existing board and filed suit claiming Ryerson had taken too long to reschedule the annual meeting, originally planned for May.
Jacob Kotzubei, the Platinum Equity executive leading the transaction, said he expected the public-to-private transition to be seamless.
“Platinum Equity is extremely excited about what the executive management team and dedicated employees have created at Ryerson. We are looking forward to working together with the entire team at Ryerson, as well as its customers and vendors, to create additional value through Platinum’s unique operations- focused approach,” Kotzubei said.
Ryerson announced on Feb. 14, that the board of directors had retained UBS Investment Bank as its financial advisor to assist in comparing the company’s current strategic plan with other alternatives that may create additional value, including a sale of the company. Over 50 potential acquirers were identified and contacted, including foreign and domestic mills and service centers, as well as financial buyers.
Contractors Automates Material Handling
Contractors Steel Co.’s Belleville, Mich., warehouse is up and running with an automated storage and retrieval system from KASTO-Racine Inc., Export, Pa.
The 50-foot-tall system has 2,500 cassettes, which each hold up to 11,000 pounds of material. With a single operating gantry crane, the system supplies a new cassette every 100 seconds to one of two order-filling stations. Due to the high-rise design of the building, the system allows the service center to store up to 27.9 million pounds of bar stock in a footprint of only 158 by 86 feet or 13,588 square feet.
Contractor Steel’s in-house MRP system is linked to KASTO software, which tracks the movement of material into and out of inventory.
Metals USA Acquires Lynch Metals
Metals USA Holdings Corp., Houston, has acquired Lynch Metals Inc., Edison, N.J., and its branch office, Lynch Metals of California. Lynch Metals is a service center specializing in aluminum processing capabilities to the aerospace and industrial equipment industries.
The acquisition was made to strengthen Metals USA’s footprint on both coasts, while the company’s existing Midwest presence will support growth opportunities for Lynch, Metals USA officials claim.“The acquisition of Lynch Metals is an important strategic move for our Flat Rolled and Non-Ferrous Group, as we continue to emphasize an aluminum and stainless steel product mix,” says Lourenco Goncalves, chairman and CEO of Metals USA.
Clint Lynch, president and founder of Lynch Metals, will join the Metals USA senior management team. Lynch has more than 25 years experience in the metals business.
ThyssenKrupp Picks Up OnlineMetals.com
ThyssenKrupp Materials NA Inc., Southfield, Mich., has acquired OnlineMetals.com, Seattle, Wash., a web-based retailer of metals and plastics. OnlineMetals.com will be integrated into the ThyssenKrupp Materials NA distribution operations as a separate business unit focused on online processing of small and single-item orders.
ThyssenKrupp Materials NA will retain all of the key operational and management personnel of OnlineMetals.com, including John K. Byrum, president and prior owner of OnlineMetals.com. Byrum will report to a newly appointed management board for the new on-line unit headed by ThyssenKrupp Materials NA President and CEO Richard J. Greaves.
“This acquisition provides ThyssenKrupp Materials NA with an entry into the web-based metals and plastics distribution market,” Greaves says.
Samuel Manu-Tech Sells Energy Steel Products
Samuel Manu-Tech Inc., Toronto, has sold its subsidiary Energy Steel Products Inc. to ESP Acquisition LLC, a firm owned jointly by ESP management and Lone Star New Markets LP, a Dallas-based private equity firm. ESP Acquisition LLC paid Samuel Manu-Tech $25 million for the operation.
“Lone Star is excited to welcome Energy Steel Products to its portfolio,” says Arthur Hollingsworth, managing partner of Lone Star. “The quality of ESP’s experienced management team, the long tenure and excellent performance of the work force, and the positive profit history made ESP very attractive.”
Mark C. Samuel, chairman and CEO of Samuel, says that ESP’s contribution to the long-term strategic goals of the company had become less certain, dictating the sale.
Outokumpu OKs New Indian Stainless Facility
Outokumpu has approved plans to build a greenfield stainless steel service center in the western part of India. The $41 million project is expected to be in operation in the first half of 2007.
The service center will have an annual capacity to stock and process up to 50,000 tons of stainless steel coil. It will have cut-to-length, slitting, polishing and brushing lines to serve the metal goods, equipment fabrication, process industries and welded pipe and tube manufacturers.
“The Indian stainless market has entered a phase of growth and this is the most opportune time for Outokumpu to support the emerging needs of the country with customized stainless steel products,” says Yatinder Suri, head of Outokumpu’s Indian sales company.
People
Andrew G. Sharkey, president and CEO of the American Iron and Steel Institute, has joined the board of directors at Reliance Steel & Aluminum Co., Los Angeles.
The Engineered Metals Group of Samuel, Son & Co. Inc., has hired Mike Heitzenrader as product manager to direct the company’s expansion into aluminum products.
Lawrence Murray has been appointed president of the press division for Dennen Steel. Murray will oversee sales, business development and manufacturing operations at Dennen’s metal stamping facilities in Grand Rapids, Mich., and Burns Harbor, Ind.
Greg Davis has joined Vulcanium Metals, Northbrook, Ill., as head of sales for the company’s Midwest region. Also, Jody Black was added in field sales, Rachel Kusienski joined the company in inside sales, and Jay Weis was hired as controller.
Toni Kirk has been promoted to regional manager at Marmon/Keystone's Vancouver, B.C. facility, replacing the retired Paul Ranger. Doug Laalo will replace Kirk as sales manager at the location.
Bob Morehouse has been hired as Midwest regional sales manager for Service Center Metals, Prince George, Va.
James Harpster has been hired as executive vice president at Greer Steel, Dover Ohio. Harpster most recently worked as Eastern regional manager for LA-based Precision Specialty Metals.
Scott Jones has been appointed interim president of American Steel and Aluminum Corp, a U.S. subsidiary of Novamerican Steel, Montreal. Jones is president of Novamerican Steel.
Wendell McDonald has been appointed national sales manager for Turrett Steel Industries Inc., Leetsdale, Pa. McDonald had been general sales manager for Hamilton Specialty Bar Corp.
Briefs
Aerodyne Alloys, has leased an additional 15,000 square feet at its headquarters in South Windsor, Ontario, to accommodate additional business. The O’Neal High Performance Metals group company, which supplies high-temperature specialty alloys, will use 62,000-square-feet of space.
JDM Steel Service Inc., Chicago Heights, Ill., will host an open house Sept. 25 to demonstrate its new SCS Coil Line from Red Bud Industries Inc., Red Bud, Ill. For more information, e-mail dwalker@redbudindustries.com.
Flatrolled Steel Inc., Houston, has purchased an Advanced Gauging AGT400 thickness gauge and SPC reporting system for its 72-inch Red Bud multi-blanking line. Additionally, Taylor Steel, Stoney Creek, Ontario, has purchased an AGT 400 thickness gauge for its 72-inch Herr-Voss slitter, while three AGT400 front-ends were purchased by SeverCorr, Columbia, Miss., for use on its hot-dip galvanizing line.
Morton Manufacturing Co., Libertyville, Ill., has purchased its second 0.135-inch precision blanking line from Red Bud Industries, Red Bud, Ill.
FerrouSouth Metals Processing Plant, Iuka, Miss., has installed two large-capacity dual arbor scrap choppers from Butech Bliss at its facility. The machines will process 75,000 psi shear strength carbon steel up to a maximum line speed of 600 fpm and a material width of 72 inches.
Obituary: Thomas Andrew Mallan
Thomas Andrew Mallan, founder and chairman of the board emeritus of Main Steel Polishing Co., Inc, Tinton Falls, N.J., died July 19, at age 73.
Mallan graduated from the New York Military Academy in 1953 and attended the University of Massachusetts. He began his career in the metals industry with the G.A. Feld Co. in 1954 before founding Main Steel in the Bronx in 1956.
The company he founded has grown from a single location to the largest independent toll processor in North America, with 10 locations across the United States and Mexico.
Mallan was active in the Metals Service Center Institute and won the organization’s President’s Award in 2006. He also started the toll processing group for the Fabricators & Manufacturers Association and was a supporter of the Association of Women in the Metals Industry.
He is survived by his wife, Linda, three children and two grandchildren.
