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Steel Dynamics to Acquire Remaining Stake in New Process Steel

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Key Takeaways

  • Steel Dynamics will acquire the remaining 55% stake in New Process Steel.
  • New Process is its largest flat roll steel customer with strong quality standards.
  • The deal adds six facilities and 1,275 employees across the United States and Mexico.

Steel Dynamics, Inc. (STLD - Free Report) has agreed to acquire the remaining 55% equity interest in New Process Steel, L.P. It has entered into a definitive agreement with New Process Steel for the transaction, which is subject to customary closing conditions and receipt of regulatory approvals.

New Process Steel is a prominent metal and supply-chain solutions company, headquartered in Houston, TX, with an employee base of approximately 1,275 individuals. It has a long-standing relationship as a significant customer of Steel Dynamics and is currently the latter’s single largest flat roll steel customer. New Process Steel’s high-quality standards, along with a strong customer base, will benefit Steel Dynamics gain more exposure in value-added manufacturing solutions, while also focusing on its legacy flat rolled steel solutions.

The strategic move will result in Steel Dynamics acquiring two manufacturing locations in Mexico and four in the United States, two of which are located at its Butler and Columbus Flat Roll Steel units.

STLD stock has gained 12.4% over the past year against the industry’s 14.7% decline.

Zacks Investment Research
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The company expects trade uncertainties and tax impacts to mitigate. It remains hopeful that the interest rate environment will improve, unfairly traded imports will decline and the manufacturing sector will keep growing in the United States. As such, scenarios will directly support pricing and demand. Outlook remains positive. U.S. International Trade Commission’s preliminary determinations on coated flat rolled steel are also poised to improve its operating platforms, although final determinations are yet to come out.

STLD’s Zacks Rank & Key Picks

STLD currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are CF IndustriesHoldings, Inc. (CF - Free Report) , Nutrien Ltd. (NTR - Free Report) and Carpenter Technology Corporation (CRS - Free Report) . While CF and NTR currently sport a Zacks Rank #1 (Strong Buy) each, CRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $7.65 per share, indicating a 13.5% year-over-year increase.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 25.29%. CF’s shares have gained 7.3% in the past year.

The Zacks Consensus Estimate for NTR’s current-year earnings is pegged at $4.30 per share, implying a 23.92% year-over-year surge. Its earnings beat the Zacks Consensus Estimate in one of the trailing four quarters while missing the rest. Its shares have gained 24.2% in the past year.

The Zacks Consensus Estimate for CRS’ fiscal 2025 earnings is pegged at $9.36 per share, indicating a rise of 25.13% from year-ago levels. The company’s earnings beat the consensus estimate in each of the trailing four quarters. Its shares have soared 69.1% in the past year.

 

 

 

 

 


 

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