Reliance Steel-Metals USA Merger Gets Shareholder OK - Analyst Blog

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Reliance Steel & Aluminum Co. 's ( RS ) impending acquisition of Metals USA Holdings Corp. ( MUSA ) has been cleared by the latter's shareholders.

Shareholders holding 87.3% of Metals USA's outstanding shares voted in favor of the deal at a special stockholders' meeting. Metals USA expects the transaction to complete after close of business on Apr 12, subject to the satisfaction/waiver of the earlier disclosed closing conditions.

Reliance Steel, in Feb 2013, landed an agreement to acquire all outstanding shares of Metals USA for $20.65 per share in cash. Pursuant to the merger agreement, RSAC Acquisition Corp., a fully-owned subsidiary of Reliance Steel, will merge with Metals USA. Following the deal closure, Metals USA will operate as a wholly-owned subsidiary of Reliance Steel.

Metals USA makes steel and aluminum components and had assets worth $1 billion and sales of $2 billion at the end of 2012. With the acquisition, Reliance Steel will add about 48 service centers, which are strategically located throughout the U.S., to its existing operations.

Metals USA is a strategic fit with Reliance Steel's portfolio and complements its existing customer base, product mix and geographic footprint. The transaction is expected to be accretive to Reliance Steel's earnings immediately upon closing.

Reliance Steel has a broad and diversified product base along with a wide geographic footprint that positions it well in the industry. The company continues to evaluate and execute additional growth projects and is well placed to leverage the strong momentum across a number of end markets.

However, Reliance Steel contends with weak steel and metals pricing environment. Moreover, the non-residential construction market (the company's largest end market) continues to be the weakest link.

Reliance Steel currently holds a Zacks Rank #3 (Hold).

Other companies in the metals industry worth considering are Gibraltar Industries Inc. ( ROCK ) and Worthington Industries Inc. ( WOR ). While Gibraltar holds a Zacks Rank #1 (Strong Buy), Worthington carries a Zacks Rank #2 (Buy).



METALS USA HLDG (MUSA): Free Stock Analysis Report

GIBRALTAR INDUS (ROCK): Free Stock Analysis Report

RELIANCE STEEL (RS): Free Stock Analysis Report

WORTHINGTON IND (WOR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MUSA , ROCK , RS , WOR

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