Steel Dynamics Announces Planned Acquisition of Zimmer
by David Fleschen
Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced that as part of its raw material procurement strategy to support its new Texas flat roll steel mill, the company has entered into a definitive agreement to acquire 100% of the equity interest of Zimmer, S.A. de C.V. ("Zimmer") to be funded entirely with available cash. Zimmer is headquartered in Monterrey, Mexico and operates a ferrous and nonferrous scrap metals recycling business. Zimmer's primary operations are comprised of six scrap processing facilities strategically positioned near high-volume industrial scrap sources located throughout Central and Northern Mexico. The company also operates several third-party scrap processing locations. These combined facilities currently ship approximately 500,000 gross tons of scrap annually and have an estimated annual processing capability of approximately 2 million gross tons.
"We look forward to welcoming Zimmer to the Steel Dynamics family to further solidify our Southwest U.S. and Mexico growth strategy," said Mark D. Millett, President and Chief Executive Officer. "Combined with our existing metals recycling presence in Mexico, the addition of Zimmer provides an expanded commercial presence in the region and strengthens our raw material supply strategy, allowing for cost-effective ferrous scrap procurement for our new Texas flat roll steel mill. Zimmer provides a platform to grow our metals recycling presence in Mexico, representing a meaningful achievement in our raw material sourcing strategy for our Texas steel mill, which is currently under construction and expected to begin operations mid-year 2021."
This transaction is subject to customary closing conditions and receipt of required regulatory approvals.
Source: Steel Dynamics, Photo: Fotolia