Reliance Steel & Aluminum Co. Acquires Remaining Ownership Interest of Acero Prime
by David Fleschen
eliance Steel & Aluminum Co. (NYSE: RS) announced today that it has acquired the remaining 40% ownership interest in Acero Prime, S. de R.L. de C.V. (“Acero Prime”), a toll processor in Mexico, from its joint venture partner, an affiliate of United States Steel Corporation (“U.S. Steel”). Reliance also concurrently purchased U.S. Steel’s interest in Acero Prime Servicios, S. de R.L. de C.V., an affiliate of Acero Prime. With these transactions, Reliance has assumed 100% ownership of Acero Prime’s four toll processing locations in Mexico, including the recently constructed Monterrey facility which opened in July 2016. The terms of the transaction were not disclosed.
“Acquiring the remaining ownership interest in Acero Prime supports our capital allocation strategy of investing in high return opportunities that enhance our long-term earnings potential,” commented Gregg Mollins, President and Chief Executive Officer of Reliance. “Our toll processing businesses are strong performers that provide high levels of value-added processing, and we believe complete ownership will allow us to more fully support volume growth in important end markets such as automotive. Acero Prime is a highly respected name in the industry and community and we look forward to expanding our presence in toll processing, where demand continues to be strong.”
Founded in 1999, Acero Prime performs metal processing services such as slitting, multi-blanking and oxy-fuel cutting, as well as storage and supply-chain management for a variety of different industries including automotive, home appliance, lighting, HVAC, machinery and heavy equipment. Reliance acquired its initial 40% ownership interest in Acero Prime in connection with the August 2008 acquisition of the PNA Group which included 23 service centers and seven joint ventures. Reliance acquired a controlling interest in Acero Prime in October 2014 and increased its ownership to 60% in November 2014. For the year ended December 31, 2017, Acero Prime’s net sales were $37.6 million.
source: Reliance Steel & Aluminium, photo: fotoalia