GFG Acquires Keystone Consolidated Industries
By Metal Center News Staff
on Dec 4, 2018
GFG Alliance has agreed to purchase all of the outstanding stock in Keystone Consolidated Industries Inc. from Contran Corp. Under terms of the deal GFG Alliance company Liberty Steel USA will acquire KCI, including all its subsidiaries, for $320 million in cash.
The purchase is expected to close on or before the end of the year.
“The Keystone acquisition is a core part of GFG’s Greensteel vision to become a leading U.S. producer of high-quality, cleanly produced steel,” said Sanjeev Gupta, executive chairman of Liberty and the GFG Alliance. “As we look ahead to the future, GFG will benefit from Keystone’s century-long history, its robust operations, and its reputation for producing top-quality steel.”
Keystone Steel and Wire, a division of KCI, has a 100-plus year history in the steel and steel products business. The acquisition delivers a wire rod facility with a 1.1-million capacity electric arc furnace, the agricultural fence products of RedBrand, industrial wire, an MBQ/SBQ bar mill, three welded wire reinforcement mesh facilities and a PC strand facility to the Liberty Steel USA family.
KCI has been consistently profitable and has substantially improved its profitability over the last 5 years as it expanded significantly into value-added products to augment its original position as a preeminent supplier of low-carbon wire rod. The acquisition will vault Liberty into position as one of the leading producers of wire rod in the United States.
After the transaction, Liberty Steel USA will have up to 1.8 million metric tons of EAF melting capacity, 2 million metric tons of wire rod rolling capacity, significant value-added downstream businesses and more than 1,300 employees. The combined company will have operations in Illinois, Ohio, South Carolina, New Mexico, Texas and Georgia.
“KCI and its businesses offer Liberty the chance to merge our existing U.S. steel business with one of the country’s most productive wire rod operations,” said GFG North American CIO Grant Quasha. “Combined with Liberty Steel Georgetown, KCI will increase our downstream capabilities, create critical synergies, add strong management and provide better value and products for customers as we advance our U.S. steel business to our 5 million tons per annum.”