This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
Zacks Rank Education - Learn more about the Zacks Rank
Zacks Rank Home - All Zacks Rank resources in one place
Zacks Premium - The only way to get access to the Zacks Rank
This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
Reliance Steel & Aluminum Co. (RS - Analyst Report) announced that it has entered into an agreement to acquire all outstanding shares of Metals USA Holdings Corp. (MUSA) for $20.65 per share in cash, representing an enterprise value of around $1.2 billion.
The boards of both the companies have unanimously approved the acquisition. The deal is also subject to the approval of the shareholders of Metals USA. The transaction is expected to be accretive to Reliance Steel’s earnings immediately upon closing, scheduled in the second quarter of 2013.
Reliance Steel’s shares jumped 8.6% following the announcement of the acquisition.
Metals USA manufactures steel and aluminum components and had assets worth $1 billion and sales of $2 billion at the end of 2012. With the acquisition, Reliance Steel will add about 48 service centers, which are strategically located throughout the U.S., to its existing operations. Metals USA is a strategic fit with Reliance Steel’s portfolio and complements its existing customer base, product mix and geographic footprint.
Reliance Steel stated that Metals USA will continue to operate under its current brand names. It plans to fund the deal and refinance Metals USA's existing debt from a $1.5 billion credit facility, along with funds from accessing the bank credit markets and the debt capital markets.
The agreement includes a 30-day "go-shop" period that allows Metals USA to seek alternative bids from third parties. If Metals USA terminates its deal with Reliance Steel to accept a third-party offer, the latter will get an undisclosed breakup fee.
Reliance Steel is the largest metals service center company in North America and it is expected that the company will have total assets of over $6.5 billion and annual sales of over $10 billion after the acquisition.
Reliance Steel currently retains a Zacks Rank #4 (Sell).
Other companies in the metals industry having a favorable Zacks Rank are Worthington Industries Inc. (WOR - Snapshot Report) and Gibraltar Industries Inc. (ROCK - Analyst Report) with both carrying a Zacks Rank #2 (Buy).
Please login to Zacks.com or register to post a comment.