Steel Dynamics to Acquire CSN Heartland Flat Roll Operations
15 May 2018
Steel Dynamics, Inc today announced that it has entered into a definitive agreement to acquire Companhia Siderurgica Nacional, LLC ("Heartland") from CSN Steel, S.L.U., a wholly-owned subsidiary of Companhia Siderurgica Nacional. Located in Terre Haute, Indiana, Heartland produces various types of higher-margin, flat roll steel by further processing hot roll coils into pickle and oil, cold roll, and galvanized products. Steel Dynamics has agreed to purchase Heartland for $400 million in cash inclusive of $60 million of normalized working capital, subject to customary transaction purchase price adjustments. Steel Dynamics believes the purchase price approximates current replacement value. The transaction is expected to be accretive to near-term earnings and cash flow per share. The acquisition will expand Steel Dynamics' annual flat roll steel shipping capacity to 8.4 million tons and total shipping capability to 12.4 million tons. The additional exposure to lighter-gauge and greater width flat roll steel offerings will broaden the Company's value-added product portfolio, enhancing Steel Dynamics position as a leading North American steel producer.
"The acquisition of Heartland represents a step in the continuation of our growth strategy," said Mark D. Millett, Chief Executive Officer. "It levers our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification. We look forward to welcoming the Heartland employees and customers into the Steel Dynamics family, and working with them to drive future growth and success.
"We have positioned our capital structure and organizational framework for growth," continued Millett, "and we believe this acquisition will result in numerous future earnings benefits both to Heartland's current operations and to our Midwest flat roll operations. In combination with our current operations, Heartland brings a tremendous amount of operating flexibility and optionality. As a part of our broader business platform, Heartland is expected to provide numerous synergies with our existing operations, and we look forward to levering these opportunities in the future."