On Wednesday Los Angeles-based service center Reliance Steel & Aluminum Co. and service center Metals USA Holdings Corp. announced a definitive merger agreement whereby Reliance Steel will acquire all of the outstanding shares of 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 Q2 2013. 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 already 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.
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."
Reliance plans to operate Metals USA under its current brand names.
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.