Fort Wayne-based Steel Dynamics Inc. (Nasdaq: STLD) has announced an agreement to acquire Alabama-based Vulcan Threaded Products Inc. The deal is valued at $126 million and is expected to be complete in August. Vulcan makes threaded rod and metal bar products.

Chief Executive Officer Mark Millett says the acquisition is part of a strategy rolled-out last year to pursue "higher-margin downstream business opportunities" to boost growth. He adds the goal is to "reduce volatility during both strong and weak market cycles, given steel raw material supply optionality. During weak steel demand environments these businesses could purchase steel 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 perfectly and fits well within our core operating strengths."

Vulcan's lines include threaded steel rod, cold finished bar processing and heat treated bar, shipping around 89,000 tons over the last year. The companies are long time partners, with Vulcan purchasing tens of thousands of tons of steel from SDI's Engineered Bar Products Division over the last decade. Steel Dynamics anticipates an internal jump in use of its steel by the EB division once Vulcan's operations are folded in.

The deal must still clear regulatory hurdles. Steel Dynamics currently employs around 7,500, most of which in the U.S.

 

Source : insideindianabusiness.com

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