Ryerson Pursues Sale—Without Harbinger
Harbinger Capital Partners’ effort to unseat Ryerson’s incumbent board was unsuccessful last month, clearing the way for the service center giant to proceed with its proposed sale to Platinum Equity.
In a vote at the company’s annual meeting—despite calls for a management change by Harbinger—all 11 of Ryerson’s existing directors were returned to their positions on the board.
“We anticipated that shareholders would support us,” says Terry Rogers, Ryerson’s treasurer and vice president of finance. “It was an important decision for them.”
Following the defeat, Harbinger announced in a regulatory filing that it had sold all its shares in Chicago-based Ryerson. Harbinger owned 9.6 percent of Ryerson shares at the time it proposed an alternative slate of directors, making it the company’s largest shareholder.
Earlier this year, Harbinger expressed dissatisfaction with the performance and direction of the nation’s largest service center company and called for the election of a new board. In response, Ryerson management announced plans to analyze all strategic options for the company’s future, delaying the company’s annual meeting from May to August. Harbinger filed suit over the delay, contending it was a stalling tactic designed to subvert the board vote.
In July, Ryerson officials agreed to a purchase offer estimated at $2 billion from Platinum Equity, a California-based investment firm. Privately held Platinum Equity already operates the PNA Group, which includes Feralloy, Delta Steel, Infra-Steel and Metal Supply Co. Harbinger opposed the offer as too low.
“I would like to thank our stockholders for their continued support,” says Neil Novich, chief executive officer of Ryerson. “We now look forward to giving Ryerson’s stockholders the opportunity to vote on the Platinum Equity transaction for $34.50 per share at a special meeting that will be scheduled in the coming months. In the meantime, we will continue to focus on improving our business and implementing our strategic plan on behalf of our stockholders.”
Officials from both Ryerson and Harbinger spent the weeks leading up to the vote trying to convince shareholders of the merits of their differing positions. Most advisory firms sided with retaining the current board of directors. The acquisition by Platinum Equity will go through regulatory channels, with a vote possible before the end of the year, say company officials.
Cargill, Robinson Form RPS Venture
Cargill and Robinson Steel have entered a joint venture to produce and distribute RPS Sheet and Plate. The venture will have an initial capacity of 200,000 tons per year of cold-reduced cut-to-length hot-rolled steel from a jointly owned 100,000-square-foot facility in Granite City, Ill.
Cargill will source the hot-rolled band and provide all of the sales and marketing to support the new venture. Robinson will manage and operate production of the facility. As a licensed distributor, Cargill will have access to production from Robinson’s other Granite City processing line and its East Chicago, Ind., facility. Terms of the deal were not disclosed.
“Our strategic relationship with Robinson will allow us to immediately increase our product offerings to meet our customers’ growing demands for panel flat sheets and plates with RPS quality, the recognized industry standard,” says Mike Taylor, president of Cargill Steel Service Centers, Minneapolis. “This venture is perfectly aligned with our growth strategy, and expands and extends our market leadership position in the processing of hot-rolled steel bands.”
Robinson Steel is headquartered in East Chicago, where Cargill also maintains a facility. In addition to cold reduction lines, Robinson operates seven RPS laser production and distribution centers, providing precision-cut parts to manufacturers and fabricators.
“We are proud that Cargill selected RPS to complete its product line,” says Paul Labriola, president and CEO of Robinson Steel. “We are excited to pursue the opportunities that will result from bundling our unique value proposition with Cargill’s global iron and steel supply chain and risk management capabilities.”
Worthington Ventures into Mexico, Europe
Worthington Industries Inc., Columbus, Ohio, has agreed to acquire 50 percent of Mexican service center company Serviacero Planos. The joint venture, Serviacero Worthington, will operate two service centers in Leon and Queretaro in central Mexico. The facilities will offer slitting, multi-blanking and cutting-to-length for automotive, appliance and electronics customers.
“This joint venture aligns with our stated goal of expanding our steel processing business beyond its current geographic boundaries into higher growth markets,” says Mark Russell, Worthington Steel president. “By joining with Serviacero, we will be able to immediately offer steel processing services to an increasing number of customers with current and expanding operations in Mexico.”
Worthington also has agreed to form a joint venture with The Magnetto Group to operate a steel processing facility in Kosice, Slovakia. The venture, to be completed this month, will offer slitting, blanking and cut-to-length services to customers throughout Central Europe.
The venture will mark Worthington’s first European processing operation.
Reliance Buys Back Stock
Reliance Steel & Aluminum Co., Los Angeles, has been actively purchasing shares of the company’s common stock on the open market under Reliance’s stock repurchase plan. The company purchased 645,204 shares at an average cost of $44.69 per share from Aug. 16 through Aug. 20.
“We are strong believers that it is in the best long-term interest of our shareholders for us to repurchase our stock under the right circumstances, including when we believe the price presents the opportunity to obtain a higher return on our investment than alternative uses of capital,” says David H. Hannah, Reliance’s chief executive officer. “Recent stock market activity resulting in a significant decrease in the market value of our stock is not in line with our business outlook.”
Trent Tube Acquired by Plymouth Tube Co.
Plymouth Tube Co., Warrenville, Ill., has acquired Trent Tube from Crucible Materials Corp. The transaction was effective Aug. 11.
The purchase includes the Trentweld plant in East Troy, Wis., and the Trent Processing Plant in Chicago. Previously, in 2005, Plymouth Tube acquired Crucible’s Cold Work Anneal plant, also in East Troy.
“We are excited by the addition of our new offerings to the market and look forward to promoting the strengths of these new Plymouth facilities,” says Don Van Pelt Jr., president of Plymouth Tube.
Trent Tube’s Trentweld Plant produces 1/8th-inch to 4-inch diameter welded and welded-and-drawn stainless steel tubing including nickel and high alloys for a variety of applications. The Trent Processing Plant provides slit and edged stainless steel and nickel alloy coils to the Trent Weld plant, as well as other steel processors.
Samuel, Generation Metals
Form UK Aerospace Venture
Samuel, Son & Co., Mississauga, Ontario, has entered a joint venture agreement with Generation Metals International Ltd. of the United Kingdom.
The new company, which will trade as Samuel, Son & Co. Ltd. (UK), combines Generation Metals’ experience as a leading aerospace supply chain specialist with Samuel, Son & Co.’s position as one of the leading North American processors and distributors of metals, says Wayne Bassett, Samuel president.
Samuel, Son & Co. (UK) Ltd. is opening a modern, 23,000-square-foot facility just north of Birmingham with the capability of processing a range of aerospace raw material metallic commodities with particular attention to aerospace aluminum plate products.
Generation Metals International and Samuel, Son & Co. (UK) Ltd. will continue to expand and invest as necessary to support Eclipse Aviation Corp. in its role as the world’s leading manufacturer of Very Light Jets, add company officials.
Briefs
Samuel Steel Pickling Co., a division of Samuel Manu-Tech Inc. of Toronto, has recently completed capital improvements on its Cleveland pickling line. A new stain-free rinse system was installed by the Nelson Steel Consulting & Technology Group along with a complete upgrade of the electrical control system, PLC and drive units, supplied by Rockwell Automation.
Oregon Feralloy Partners has purchased new entry equipment from Butech Bliss for its temper mill/cut-to-length line. The recoiler, crop shear, coil breaker and other equipment will process high-strength steels up to 0.777-inches thick by 102-inches wide and 100,000 psi yield strength with a maximum line speed of 600 feet per minute. It will allow the Portland-based service center to supply thicker, wider and heavier coils and cut-to-length plates.
Ottosteel, Los Angeles, has selected STEEL PLUS from Bayern for the company’s inventory control, sales, purchasing and accounting software.
Rolled Alloys, Temperance, Mich., has begun stocking NiFe Alloy 36 plate products. The company stocks the alloy in ranges from 3/16th-inch through 2-inch plate thickness.
Industrial Metal Supply Co., Los Angeles, has successfully completed a three-week pilot implementation of the Verticent ERP for Metals Solution. It will roll out Verticent to each of its five western U.S. service center locations in California and Arizona.
Correction
In the August issue of Metal Center News, ThyssenKrupp Materials NA President and COO Richard J. Greaves was incorrectly identified as the company CEO.
People
President and CEO Frank M. Walker has retired from his position at Feralloy Corp. He spent 14 years in the position. Before coming to the Chicago-based service center company, now a part of the PNA Group, Walker held several executive positions at U.S. Steel. Roger B. Sippey, who had been serving as Feralloy’s executive vice president, will replace Walker. Sippey has been with Feralloy for 39 years.
Frank L. Ruggiero has been named national marketing manager at Future Metals Inc., Tamarac, Fla., a Marmon/Keystone affiliate. Ruggeiro has 10 years experience in aerospace tubing distribution.
Annette Tiesman has been promoted from vice president of sales to executive vice president by Ferguson Metals, Hamilton, Ohio. Tiesman has more than 22 years of sales experience, including 14 in the metals industry.
Bill Wetmore has been hired as chief operating officer at Aluminum Shapes, Delair, N.J. Wetmore has more that 30 years experience in the aluminum extrusion industry.
