LOS ANGELES & FT. LAUDERDALE, Fla.--(BUSINESS WIRE)--
Reliance Steel & Aluminum Co. (NYSE:RS) and Metals USA Holdings Corp.
(NYSE:MUSA) today announced a definitive merger agreement whereby
Reliance Steel & Aluminum Co. (“Reliance”) will acquire all outstanding
shares of Metals USA Holdings Corp. (“Metals USA”) for $20.65 per share
in cash, representing an enterprise value of approximately $1.2 billion.
The transaction is expected to close in the second quarter of 2013.
Metals USA’s assets at December 31, 2012 and sales for the year then
ended were approximately $1.0 billion and $2.0 billion, respectively.
Upon completion of the acquisition, Reliance will have total assets of
over $6.5 billion and annual sales of over $10.0 billion.
The transaction has been unanimously approved by the respective Boards
of Directors of Reliance and Metals USA. The transaction is subject to
approval by Metals USA stockholders, along with the receipt of
regulatory clearances and the satisfaction of other customary closing
conditions, and includes a 30-day “go-shop” period. David H. Hannah,
Chairman and Chief Executive Officer of Reliance, will continue as
Chairman and Chief Executive Officer of the combined company. Lourenco
Goncalves, Chairman, President and Chief Executive Officer of Metals USA
will retire upon closing of the transaction.
Mr. Hannah commented, "We are very excited about Metals USA becoming an
important part of the Reliance family of companies. This is our largest
acquisition to date and will add a total of 48 service centers
strategically located throughout the United States to our existing
operations. Metals USA is an excellent fit and nicely complements
Reliance’s existing customer base, product mix and geographic footprint.
Additionally, the transaction is expected to be accretive immediately
upon closing and we believe that the combined company will be well
positioned to continue to outperform the broader metals service center
industry."
"I am extremely proud of the company we have built,” said Mr. Goncalves.
“Metals USA’s strong position in the metals service center industry will
strategically enhance Reliance’s current business, and I am confident
that together, our companies will continue to excel. We believe this
transaction creates significant value and is in the best interest of our
stockholders."
“We would like to thank Lourenco Goncalves and the rest of the employees
of Metals USA for their dedication and efforts over the last several
years in making Metals USA one of the premier service center businesses
in the United States,” said M. Ali Rashid, Senior Partner at Apollo. “We
look forward to working with the management team and our fellow
directors to conclude this important transaction for Metals USA.”
Reliance plans to operate Metals USA under its current brand names. This
will enable Reliance to retain Metals USA’s brand equity while allowing
the combined organization to capitalize on the resources, capabilities
and leading practices of each entity, benefiting all stakeholders.
Reliance expects to fund the transaction and refinance Metals USA’s
existing indebtedness from Reliance’s existing $1.5 billion credit
facility, together with funds from accessing the bank credit markets, as
well as the debt capital markets. This expected financing will also
provide additional liquidity to allow Reliance to support and continue
to grow its operations. On a pro forma basis giving effect to this
transaction, Reliance’s net debt-to-total capital ratio is expected to
be approximately 42%, which is in line with Reliance’s targeted leverage.
The merger agreement permits Metals USA to solicit alternative
acquisition proposals from third parties through March 8, 2013, and
Metals USA intends to do so with the assistance of its financial and
legal advisors. It is not anticipated that any developments will be
disclosed with regard to this process unless the Metals USA Board of
Directors makes an affirmative decision to proceed with an alternative
acquisition proposal. In addition, Metals USA may, subject to certain
procedural limitations under the terms of the definitive merger
agreement, respond to unsolicited alternative acquisition proposals
subsequent to March 8, 2013. If the merger agreement is terminated under
certain circumstances relating to an alternative transaction, Reliance
will be entitled to receive a termination fee from Metals USA.
Investment funds affiliated with Apollo Global Management, LLC
(NYSE:APO), which own approximately 53% of the outstanding shares of
Metals USA common stock, have entered into a Voting Agreement pursuant
to which they have agreed to vote in favor of the merger. Consummation
of the merger requires approval by the holders of a majority of the
outstanding shares of common stock of Metals USA.
Moelis & Company LLC is acting as exclusive financial advisor to
Reliance. Davis Polk & Wardwell LLP is serving as Reliance’s outside
legal advisor. Goldman Sachs & Co. is acting as financial advisor to
Metals USA. Morgan Stanley also provided the Board of Directors of
Metals USA with a fairness opinion in connection with the transaction.
Wachtell, Lipton, Rosen & Katz is serving as outside legal advisor to
Metals USA.
Conference Call
Reliance will host a conference call today,
Wednesday, February 6, 2013 at 11:00 a.m. ET / 8:00 a.m. PT to discuss
the transaction. David Hannah, Reliance Steel & Aluminum Co.'s Chairman
of the Board and Chief Executive Officer, Gregg Mollins, President and
Chief Operating Officer and Karla Lewis, Executive Vice President and
Chief Financial Officer, will host the call. To listen to the live call
by telephone, please dial (888) 267-2845 or (973) 413-6102 approximately
10 minutes prior to the start time and use the conference entry code:
8406. Additionally, a live webcast of the call will be available on
Reliance Steel & Aluminum Co.’s web site at www.rsac.com.
Participants are encouraged to visit the web site at least 15 minutes
prior to the start of the call to register and to download and install
any necessary audio software.
For those unable to participate during the live broadcast, a replay of
the call will also be available beginning that same day at 1:00 p.m.
Eastern Time until 11:59 p.m. Eastern Time on March 6, 2013 by dialing
(800) 332-6854 or (973)528-0005 and entering the conference entry code:
8406. The webcast will remain posted on the investor relations portion
of Reliance’s web site at www.rsac.com
for 90 days.
About Reliance Steel & Aluminum Co.
Reliance Steel &
Aluminum Co., headquartered in Los Angeles, California, is the largest
metals service center company in North America. Through a network of
more than 220 locations in 38 states and Australia, Belgium, Canada,
China, Malaysia, Mexico, Singapore, South Korea, the U.A.E. and the
United Kingdom, Reliance provides value-added metals processing services
and distributes a full line of over 100,000 metal products to more than
125,000 customers in a broad range of industries.
Reliance Steel & Aluminum Co.’s press releases and additional
information are available on Reliance’s web site at www.rsac.com.
Additionally, copies of Reliance’s filings with the SEC, together with
other information investors may find of interest, can be found at
Reliance's website at www.rsac.com
under "Investor Information." Reliance was named to the 2012 “Fortune500” List and the 2012 Fortune List of “The World’s
Most Admired Companies.”
About Metals USA
Metals USA provides a wide range of
products and services in the heavy carbon steel, flat-rolled steel,
non-ferrous metals, and building products markets. For more information,
visit Metals USA's website at www.metalsusa.com.
The information contained in this release is limited and Metals USA
encourages interested parties to read Metals USA's historical Form 10-Ks
and Form 10-Qs which are on file with the Securities and Exchange
Commission (SEC) for more complete historical information about Metals
USA. Additionally, copies of Metals USA's filings with the SEC, together
with press releases and other information investors may find of
interest, can be found at Metals USA's website at www.metalsusa.com
under "Investor Relations."
Forward-Looking Statements
Certain statements in this press
release may constitute "forward-looking" statements, as defined under
the Private Securities Litigation Reform Act of 1995. Words such as
"expects," "anticipates," "intends," "plans," "projects," "believes,"
"estimates," "forecasts" and similar expressions are used to identify
these forward-looking statements. Forward-looking statements in this
press release include, but are not limited to, statements concerning the
proposed merger transaction between Metals USA and Reliance and
Reliance’s financing plans and financial performance and projections
concerning the capital structure, balance sheet and expected interest
expense savings of Reliance after the merger. Forward-looking statements
are based upon assumptions as to future events that may not prove to be
accurate. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that are difficult to
predict. Actual outcomes and results may differ materially from what is
expressed or forecasted in these forward-looking statements as a result
of various important factors, including, but not limited to, those
disclosed in both companies’ historic periodic filings with the SEC.
There can be no assurance that the proposed merger transaction will be
consummated. As a result, these statements speak only as of the date
that they were made, and Metals USA and Reliance Steel & Aluminum Co.
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
Additional Information and Where to Find It
This document may be deemed to be solicitation material in respect of
the proposed merger between Metals USA and Reliance. Metals USA will
file with the SEC and mail or otherwise provide to its stockholders a
proxy statement regarding the proposed merger. Investors and security
holders are urged to read the proxy statement and other documents
relating to the acquisition when they become available, because they
will contain important information. Investors and security holders may
obtain a free copy of the proxy statement and other documents that
Metals USA files with the SEC (when available) from the SEC’s website at www.sec.gov
and Metals USA’s website at www.metalsusa.com.
In addition, the proxy statement and other documents filed by Metals USA
with the SEC (when available) may be obtained from Metals USA free of
charge by directing a request to Metals USA Holdings Corp., Corporate
Secretary, 2400 E. Commercial Blvd., Suite 905, Ft. Lauderdale, FL
33308, telephone: (954) 202-4000.
Metals USA and its directors and executive officers may be deemed, under
SEC rules, to be participants in the solicitation of proxies from Metals
USA’s stockholders with respect to the proposed acquisition of Metals
USA by Reliance. Security holders may obtain information regarding the
names, affiliations and interests of such individuals in Metals USA’s
Annual Report on Form 10-K for the year ended December 31, 2011, which
was filed with the SEC on March 14, 2012, and its definitive proxy
statement for the 2012 annual meeting of stockholders, which was filed
with the SEC on April 11, 2012. Additional information regarding the
interests of such individuals in the proposed acquisition of Metals USA
by Reliance will be included in the proxy statement relating to such
acquisition when it is filed with the SEC. These documents may be
obtained free of charge from the SEC’s website at www.sec.gov
and Metals USA’s website at www.metalsusa.com.
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For Reliance:
Brenda Miyamoto, Investor Relations
213-576-2428
investor@rsac.com
or
Addo
Communications
310-829-5400
or
For Metals USA:
Robert
McPherson, Senior Vice President, CFO
954-202-4000
Source: Reliance Steel & Aluminum Co.