Gerdau forms jv with West Coast rebar fabricator

Gerdau Ameristeel Corporation announced this week that it will enter into a joint venture with Pacific Coast Steel Inc. (PCS) and Bay Area Reinforcing (BAR). Gerdau Ameristeel, the second largest mini-mill in North America, will acquire a controlling interest in the new joint venture, Pacific Coast Steel. PCS and BAR specialize in the fabrication and installation of rebar products for construction projects in California and Nevada, together operating four rebar fabrication facilities in California with a combined capacity of over 200,000 net tons per year. Gerdau Ameristeel's Vice President in charge of Commercial and Downstream Operations, Neal McCullohs commented on the transaction, “We are extremely excited about the opportunities this transaction brings. It supports our approach of strategically growing our core downstream business, rebar fabrication, and provides the knowledge base of in-field placing. The management team of PCS is well respected in the industry and second to none on the West Coast.” The purchase price for the interest in PCS is approximately $104 million, which Gerdau will fund in cash. After completion of anti-trust, regulatory reviews, and other closing conditions, the transaction is expected to close in Q4 of 2006.