FORT WAYNE, Ind., May 14, 2018 /PRNewswire/ -- Steel Dynamics,
Inc. (NASDAQ/GS: STLD) today announced that it has entered into a definitive agreement to acquire Companhia Siderurgica Nacional,
LLC ("Heartland") from CSN Steel, S.L.U., a wholly-owned subsidiary of Companhia Siderurgica Nacional ("CSN").
Located in Terre Haute, Indiana, Heartland produces various types of higher-margin, flat roll
steel by further processing hot roll coils into pickle and oil, cold roll, and galvanized products. Steel Dynamics has
agreed to purchase Heartland for $400 million in cash inclusive of $60
million of normalized working capital, subject to customary transaction purchase price adjustments. Steel Dynamics
believes the purchase price approximates current replacement value. The transaction is expected to be accretive to
near-term earnings and cash flow per share. The acquisition will expand Steel Dynamics' annual flat roll steel shipping
capacity to 8.4 million tons and total shipping capability to 12.4 million tons. The additional exposure to lighter-gauge
and greater width flat roll steel offerings will broaden the Company's value-added product portfolio, enhancing Steel Dynamics
position as a leading North American steel producer.
"The acquisition of Heartland represents a step in the continuation of our growth strategy," said Mark
D. Millett, Chief Executive Officer. "It levers our core strengths, and at the same time fulfills our initiatives to
further increase value-added product and market diversification. We look forward to welcoming the Heartland employees and
customers into the Steel Dynamics family, and working with them to drive future growth and success.
"We have positioned our capital structure and organizational framework for growth," continued Millett, "and we believe this
acquisition will result in numerous future earnings benefits both to Heartland's current operations and to our Midwest flat roll
operations. In combination with our current operations, Heartland brings a tremendous amount of operating flexibility and
optionality. As a part of our broader business platform, Heartland is expected to provide numerous synergies with our
existing operations, and we look forward to levering these opportunities in the future."
Heartland Overview
Heartland has the annual capability to produce 1.0 million tons of cold roll steel, with galvanizing capacity of 360,000
tons. Heartland is comprised of a continuous pickle line, a cold mill, and a galvanizing line. The equipment has been
upgraded, well-maintained, and is in excellent operating condition. Historically, Heartland has been operated at low
utilization, primarily focusing on galvanized products. Future plans are to utilize the full capacity of the facility,
providing high quality cold roll, pickle and oil, and galvanized products. The geographic proximity to Steel Dynamics'
other flat roll operations and certain fabrication locations provides opportunities related to logistics and production
efficiencies throughout the supply chain and customer network.
Transaction Details
The transaction has received all required corporate approvals from the respective parties. The transaction is only
subject to customary conditions and receipt of regulatory approvals. Steel Dynamics expects to obtain all necessary
regulatory approvals and complete the transaction before the end of the third quarter 2018. The purchase price will be paid
in cash from available reserves, and is subject to customary working capital adjustments dependent upon the exact date of
closing.
About Steel Dynamics, Inc.
Steel Dynamics is one of the largest domestic steel producers and metals recyclers in the
United States based on estimated annual steelmaking and metals recycling capability, with facilities located throughout
the United States, and in Mexico. Steel Dynamics produces steel products, including hot
roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold
finished steel, merchant bar products, specialty steel sections and steel joists and deck. In addition, the company
produces liquid pig iron and processes and sells ferrous and nonferrous scrap.
Forward-Looking Statements
This press release contains some predictive statements about future events, including statements related to conditions in the
steel and metallic scrap markets, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and
the operation of new or existing facilities. These statements, which we generally precede or accompany by such typical
conditional words as "anticipate," "intend," "believe," "estimate," "plan," "seek," "project" or "expect," or by the words "may,"
"will," or "should," are intended to be made as "forward-looking," subject to many risks and uncertainties, within the safe
harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are
based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the
environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty
to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently
than anticipated include: (1) the effects of uncertain economic conditions; (2) cyclical and changing industrial
demand; (3) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our
products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, pipe
and tube, and other steel-consuming industries; (4) fluctuation in the cost of key raw materials and supplies (including
steel scrap, iron units, and energy costs) and our ability to pass on any cost increases; (5) the impact of domestic and
foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired businesses;
(7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant
outages or equipment failures.
More specifically, we refer you to Steel Dynamics' more detailed explanation of these and other factors and risks that
may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K
under the headings Special Note Regarding Forward-Looking Statements and Risk Factors, in our quarterly reports on
Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission. These are
available publicly on the SEC website, www.sec.gov, and on the
Steel Dynamics website, www.steeldynamics.com:
Investors: SEC Filings.
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SOURCE Steel Dynamics, Inc.