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Nucor Snaps Up Independence Tube Corporation for $435M
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Nucor (NUE - Free Report) has agreed to buy Chicago-based Independence Tube Corporation (“ITC”) for $435 million. ITC is a leading independent producer of hollow structural section (“HSS”) steel tubing.
HSS is used in a vast range of applications including commercial construction, infrastructure, agricultural and construction equipment end-use markets. ITC purchases hot-rolled coil from suppliers to make its HSS steel tubing. It has the second biggest market share in HSS.
ITC operates four state-of-the-art facilities across Illinois and Alabama that annually make roughly 600,000 tons of HSS. Its plants are located in close proximity to Nucor's sheet mills in Decatur, AL; Crawfordsville, IN; and Ghent, KY.
The acquisition is a strategic fit and highly complementary for Nucor and is in sync with its strategy to expand the number of value-added product offerings to its customers. The addition of ITC to Nucor’s portfolio will allow the latter to offer a broader selection of products to its fabricator and service center customers and reinforce the company's foothold in the key non-residential construction end-use market.
Nucor’s shares closed 0.6% higher at $46 yesterday.
Nucor recently provided its outlook for the third quarter of 2016. The company sees higher earnings for the quarter on improved prices and favorable impact from reduced steel imports as a result of trade actions.
The company expects earnings for the third quarter to be in the band of 85 cents to 90 cents per share. That is an increase from 71 cents a share it earned a year ago and 73 cents per share recorded in the previous quarter.
Nucor said that the expected improvement in third-quarter earnings on a sequential comparison basis mainly reflects improved performance in its Steel Mills and Raw Materials divisions.
Profitability of the company’s sheet mills is expected to improve in the quarter higher average selling prices. The company also expects a significant improvement in performance in the Raw Materials segment in the third quarter compared with the second on better performance in its direct reduced iron (“DRI”) facilities. However, Nucor envisions reduced profitability in its Steel Products segment on a sequential comparison basis in the third quarter on margin compression.
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Nucor Snaps Up Independence Tube Corporation for $435M
Nucor (NUE - Free Report) has agreed to buy Chicago-based Independence Tube Corporation (“ITC”) for $435 million. ITC is a leading independent producer of hollow structural section (“HSS”) steel tubing.
HSS is used in a vast range of applications including commercial construction, infrastructure, agricultural and construction equipment end-use markets. ITC purchases hot-rolled coil from suppliers to make its HSS steel tubing. It has the second biggest market share in HSS.
ITC operates four state-of-the-art facilities across Illinois and Alabama that annually make roughly 600,000 tons of HSS. Its plants are located in close proximity to Nucor's sheet mills in Decatur, AL; Crawfordsville, IN; and Ghent, KY.
The acquisition is a strategic fit and highly complementary for Nucor and is in sync with its strategy to expand the number of value-added product offerings to its customers. The addition of ITC to Nucor’s portfolio will allow the latter to offer a broader selection of products to its fabricator and service center customers and reinforce the company's foothold in the key non-residential construction end-use market.
Nucor’s shares closed 0.6% higher at $46 yesterday.
NUCOR CORP Price
NUCOR CORP Price | NUCOR CORP Quote
Nucor recently provided its outlook for the third quarter of 2016. The company sees higher earnings for the quarter on improved prices and favorable impact from reduced steel imports as a result of trade actions.
The company expects earnings for the third quarter to be in the band of 85 cents to 90 cents per share. That is an increase from 71 cents a share it earned a year ago and 73 cents per share recorded in the previous quarter.
Nucor said that the expected improvement in third-quarter earnings on a sequential comparison basis mainly reflects improved performance in its Steel Mills and Raw Materials divisions.
Profitability of the company’s sheet mills is expected to improve in the quarter higher average selling prices. The company also expects a significant improvement in performance in the Raw Materials segment in the third quarter compared with the second on better performance in its direct reduced iron (“DRI”) facilities. However, Nucor envisions reduced profitability in its Steel Products segment on a sequential comparison basis in the third quarter on margin compression.
Nucor is a Zacks Rank #3 (Hold) stock.
Better-ranked companies in the basic materials space include Ternium S.A. (TX - Free Report) , Angang Steel Company Limited and Northwest Pipe Co. (NWPX - Free Report) , all holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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