“We would like to thank Lourenco Goncalves and the rest of the employees of Metals USA for their dedication and efforts over the last several years in making Metals USA one of the premier service center businesses in the United States,” said M. Ali Rashid, Senior Partner at Apollo. “We look forward to working with the management team and our fellow directors to conclude this important transaction for Metals USA.”
Reliance plans to operate Metals USA under its current brand names. This will enable Reliance to retain Metals USA’s brand equity while allowing the combined organization to capitalize on the resources, capabilities and leading practices of each entity, benefiting all stakeholders.
Reliance expects to fund the transaction and refinance Metals USA’s existing indebtedness from Reliance’s existing $1.5 billion credit facility, together with funds from accessing the bank credit markets, as well as the debt capital markets. This expected financing will also provide additional liquidity to allow Reliance to support and continue to grow its operations. On a pro forma basis giving effect to this transaction, Reliance’s net debt-to-total capital ratio is expected to be approximately 42%, which is in line with Reliance’s targeted leverage.
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. In addition, Metals USA may, subject to certain procedural limitations under the terms of the definitive merger agreement, respond to unsolicited alternative acquisition proposals subsequent to March 8, 2013. If the merger agreement is terminated under certain circumstances relating to an alternative transaction, Reliance will be entitled to receive a termination fee from Metals USA.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV