Ryerson Tull to Acquire Integris Metals From Alcoa and BHP Billiton
December 10, 2004Ryerson Tull, Inc., Chicago, IL, has agreed to purchase Integris Metals, Inc., a joint venture between Alcoa Inc. and BHP Billiton. Integris is one of North America's largest metals service centers, with a strong position in aluminum and stainless steel. Integris had 2003 revenues of $1.5 billion; Ryerson Tull $2.2 billion. Ryerson will purchase all of the equity interest in Integris for $410 million plus assumption of Integris' debt, which was approximately $250 million as of Oct. 1, 2004. The deal enables Alcoa and BHP Billiton to exit from a non-strategic business.
For 2003, Integris had revenue of $1.5 billion, net income of $10.9 million, and earnings before interest, taxes, depreciation and amortization of $42.8 million. With improving market ...
Ryerson Tull, Inc., Chicago, IL, has agreed to purchase Integris Metals, Inc., a joint venture between Alcoa Inc. and BHP Billiton. Integris is one of North America's largest metals service centers, with a strong position in aluminum and stainless steel. Integris had 2003 revenues of $1.5 billion; Ryerson Tull $2.2 billion. Ryerson will purchase all of the equity interest in Integris for $410 million plus assumption of Integris' debt, which was approximately $250 million as of Oct. 1, 2004. The deal enables Alcoa and BHP Billiton to exit from a non-strategic business.
For 2003, Integris had revenue of $1.5 billion, net income of $10.9 million, and earnings before interest, taxes, depreciation and amortization of $42.8 million. With improving market conditions, Integris produced first half 2004 revenue of $969.5 million, net income of $33.5 million, and EBITDA of $64.8 million, compared to revenue of $755.7 million, net income of $6.9 million, and EBITDA of $23.3 million, in the first half of 2003.
Ryerson Tull expects the acquisition to be immediately accretive. Additionally, the company plans to capture efficiencies from the combination and generate annualized cost savings of at least $30 million, within the next 18 to 24 months. Ryerson plans to finance the acquisition with cash on hand and borrowing under new secured credit facilities. The company intends to refinance a portion of these borrowings with funds raised through debt and/or equity offerings in the capital markets, as market conditions permit.
"This combination represents a unique opportunity to create an organization with superior operating efficiency and unrivaled service benefits to customers," said Neil S. Novich, chairman, president, and CEO of Ryerson Tull. "Together, we will offer specialized product expertise in stainless steel, carbon steel, and aluminum, with the ability to service customers across the United States, Canada, and Mexico, plus a substantial processing capability in India."
The agreement provides for a breakup fee of up to $20 million to be paid by Ryerson Tull if the transaction is not finalized by the end of January 2005. Ryerson Tull's preliminary estimate of goodwill associated with the acquisition is approximately $100 million.
Ryerson Tull, Inc. is a distributor and processor of metals, with 2003 revenues of $2.2 billion. The company services customers through a network of service centers across the U.S. and in Canada, Mexico and India.
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