Nucor Corp., Charlotte, N.C., has agreed to acquire Southland Tube, an independent manufacturer of hollow structural section steel tubing, because “It is an excellent fit for our Nucor family and our strategy for profitable growth,” said John Ferriola, Chairman, CEO and President of Nucor. Cost was $130 million, or approximately eight times average EBITDA over the 2011-2016 period.
“The acquisition of Southland Tube complements our recent acquisition of Independence Tube in the HSS steel tubing market., added Mr. Ferriola. “We see this market as a great opportunity to leverage Nucor’s capabilities and strengths while also adding to our portfolio of products and services for our customers.”
HSS is used in a broad array of structural and mechanical applications, including nonresidential construction, infrastructure, and heavy equipment end-use markets. Southland Tube has one facility located in Birmingham, Alabama, which is well situated to serve the HSS market.
With annual shipments of about 240,000 tons, Southland Tube has the third largest market share in HSS steel tubing.
Through the acquisitions of Independence Tube and Southland Tube, Nucor is building a market leadership position in the HSS steel tubing market and providing an additional channel to market for Nucor’s sheet steel mills. In 2006, 8% of Nucor’s total steel mill shipments were to its downstream businesses. The company expects that number to grow to about 20% with these acquisitions.
