News release from SDI Steel Dynamics Inc.:
Steel Dynamics Completes Acquisition of Vulcan Threaded Products
(August. 1, 2016) /PRNewswire/ – Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced the completion of the acquisition of Vulcan Threaded Products, Inc. (“Vulcan”). The purchase price for Vulcan and its real estate assets is $114 million on a debt free, cash free basis, including $30 million of estimated working capital, and has been funded with available cash. The transaction is expected to be immediately accretive to 2016 earnings and cash flow per share.
“We welcome the employees and customers of Vulcan into the Steel Dynamics family,” stated Mark D. Millett, President and Chief Executive Officer. “The successful completion of the Vulcan acquisition represents a step towards one of our growth objectives, the pursuit of higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes. This strategy is intended to reduce volatility during both strong and weak market cycles, given steel raw material supply optionality. During weak steel demand environments these businesses could pull-through volume internally from our own mills, thus increasing SDI’s steel mill utilization. As a consumer of special-bar-quality products currently produced at our Engineered Bar Products Division, Vulcan depicts this model and fits well within our core operating strengths.”
Vulcan, based outside of Birmingham, Alabama, is the nation’s largest manufacturer and supplier of threaded rod products, and also produces cold drawn and heat treated bar. Vulcan employs 225 people and shipped approximately 89,000 tons during the trailing twelve month period ended March 31, 2016.
About Steel Dynamics, Inc.
Steel Dynamics, Inc. 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 annual sales of $7.6 billion in 2015, approximately 7,700 employees, and manufacturing facilities primarily located throughout the United States (including six electric-arc-furnace steel mills, ten steel coating lines, an iron production facility, approximately 75 metals recycling locations and eight steel fabrication plants).
This press release contains some predictive statements about future events, including statements related to 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, appliance, pipe and tube, and other steel-consuming industries; (4) fluctuations in the cost of key raw materials (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.