Steel Dynamics Inc., Fort Wayne, Ind. , has completed the acquisition of Vulcan Threaded Products Inc., America’s largest manufacturer and supplier of threaded rod products, and also a producer of cold-drawn and heat-treated bar.
The purchase price for Vulcan and its real estate assets is $114 million on a debt-free, cash-free basis, including $30 million of estimated working capital. The purchase has been funded with available cash. The transaction is expected to be immediately accretive to 2016 earnings and cash flow per share.
“We welcome the employees and customers of Vulcan into the Steel Dynamics family,” stated Mark D. Millett, President and Chief Executive Officer. “The successful completion of the Vulcan acquisition represents a step towards one of our growth objectives, the pursuit of higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes. This strategy is intended to reduce volatility during both strong and weak market cycles, given steel raw material supply optionality.
“During weak steel demand environments these businesses could pull through volume internally from our own mills, thus increasing SDI’s steel mill utilization. As a consumer of special-bar-quality products currently produced at our Engineered Bar Products Division, Vulcan depicts this model and fits well within our core operating strengths.”
Vulcan employs 225 people and shipped approximately 89,000 tons during the trailing twelve month period ended March 31, 2016.
