Nucor Corporation announced today that it has agreed to acquire Southland Tube, an independent manufacturer of hollow structural section (HSS) steel tubing, for $130 million, or approximately eight times average EBITDA over the 2011-2016 period.
Southland Tube has one facility located in Birmingham, Alabama, with annual shipments of about 240,000 tons—the third largest market share in HSS steel tubing.
Through the acquisitions of Independence Tube and Southland Tube, Nucor is further expanding into the HSS steel tubing market and providing an additional channel to market for the company's sheet steel mills. In 2006, 8 percent of Nucor's total steel mill shipments went to downstream subsidiaries. The company expects that number to grow to about 20 percent with these acquisitions.