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Synalloy Corp., Richmond, Va., will acquire Marcegaglia’s galvanized tube operations in Munhall, Pa., for $10 million. The deal is part of a purchase-leaseback deal for the property.

The company will be operated by Synalloy’s subsidiary, Bristol Metals.

“The acquisition of Marcegaglia’s galvanized tube business represents the perfect bolt-on opportunity for Synalloy and Bristol Metals,” said Craig Bram, Synalloy’s president and CEO.  “For the past 15 months, Bristol Metals, under a service agreement with Marcegaglia, has provided the production team and supervision for this business unit. We have gained extensive knowledge of the product line, the customer base and various end markets. The high-frequency mills and associated equipment that will be part of the acquisition are not currently operating at full capacity.”

Additionally, Bristol Metals recently purchased a high-frequency Oto tube mill that the company plans to commission in the fourth quarter. 

“The excess capacity and low manufacturing cost of these high-frequency lines will enable us to further penetrate the market for galvanized tubing and begin immediate production of ornamental stainless steel pipe and tube,” Bram said.

The galvanized product line is currently generating $23 million in annual revenue, and the ornamental stainless steel pipe and tube product line will be ramped to an annual run rate of approximately $25 million by year-end.