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Nucor (NUE) Inks Deal to Purchase Metal Panels Business for $1B

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Nucor Corporation (NUE - Free Report) signed a definitive purchase agreement to buy Cornerstone Building Brands' insulated metal panels (“IMP”) business. The acquisition is for a cash price of $1 billion or roughly 10x pre-pandemic EBITDA, including expected synergies. The deal, which is subject to regulatory clearances, is expected to be completed later this year.

The IMP business has seven manufacturing facilities located throughout North America. These locations complement the footprint of Nucor Buildings Group and its existing IMP business, TrueCore. Through this deal, Nucor will purchase two brands— Centria and Metl-Span— which provide a variety of products to service high-end architectural applications to more functional as well as rapidly expanding cold storage and warehousing applications.

The demand for IMP products is anticipated to witness double-digit annual growth rates through this decade. It is being driven by evolving consumer preferences regarding e-commerce and grocery delivery as well as the expansion of data centers and server farms that require temperature-controlled climates.

Nucor is committed toward finding new and better ways to meet customers' demand. This acquisition is an excellent fit with its long-term strategy to grow its core business and expand the product portfolio, the company noted.

Shares of Nucor have gained 142.7% in the past year compared with a 137.9% surge of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

In its first-quarter call, Nucor stated that it expects second-quarter earnings to be the highest quarterly earnings in its history, exceeding the record-level set in the first quarter. Earnings are expected to be mainly driven by higher pricing and margins in the steel mills segment.

The company also sees another strong quarter for the steel products segment with second-quarter profitability projected to be comparable to the first quarter. Moreover, Nucor sees profitability in the raw materials segment to decline in the second quarter compared with first-quarter levels due to higher raw material input costs.

Nucor Corporation Price and Consensus

 

Nucor Corporation Price and Consensus

Nucor Corporation price-consensus-chart | Nucor Corporation Quote

 

Zacks Rank & Other Key Picks

Nucor currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Olin Corporation (OLN - Free Report) and Cabot Corporation (CBT - Free Report) .

Dow has a projected earnings growth rate of around 274.7% for the current year. The company’s shares have surged 55.9% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Olin has an expected earnings growth rate of around 473.3% for the current year. The company’s shares have gained 224.2% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of roughly 126% for the current fiscal. The company’s shares have surged 50.2% in the past year. It currently flaunts a Zacks Rank #2 (Buy).

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