Reliance Steel & Aluminum Co.
) newly-constituted subsidiary, Bralco Metals (Australia) Pty Ltd.,
has purchased the assets of Melbourne-based Airport Metals
(Australia) Pty Ltd, a subsidiary of Samuel Son & Co., Limited.
According to the company, Bralco has acquired almost all the assets
of Airport Metals, which is a stocking distributor of aircraft
materials and supplies. The terms of the deal were not disclosed.
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The acquisition marks the first foray of Reliance Steel into the
Australian market. Bralco Metals presently services aircrafts and
other customers from the U.S. Hence, with the acquisition of
Airport Metals, Bralco will now have a physical presence in
For more than four decades, Airport Metals has been a leading
distributor of aircraft supplies in Oceania. Thus, with the
addition of Airport Metals, Reliance has now further expanded its
global network. The company recently acquired the assets of the
Worthington Steel Vonore plant from
Worthington Industries Inc.
) to strengthen its presence in the Southeastern region of the U.S.
These moves are in sync with Reliance's philosophy of growing
inorganically. The strategic acquisitions are expected to drive
growth moving forward through improved product offerings and
expansion into new markets.
Reliance is also focused on growing its business organically. It
has shut down few small operations, opened new facilities and
expanded the existing ones. The majority of Reliance's stipulated
capital expenditure for this year will be spent on expanding its
facilities and improving its geographic footprint. The company
expects these measures to bear fruit in the long run.
We currently have a long-term Outperform recommendation on Reliance
Steel. The company, which competes with
Metals USA Holdings Corp.
) and Worthington Industries Inc., retains a Zacks #3 Rank, which
translates into a short-term (1 to 3 months) Hold rating.