ROANOKE ELECTRIC STEEL HEADLINESSteel Producers /
Roanoke Electric Steel
Steel Dynamics Completes Roanoke Electric Acquisition
Apr. 13, 2006 April 13, 2006 — Steel Dynamics, Inc. has completed its previously announced acquisition of Roanoke Electric Steel Corp. The transaction closed on April 11, 2006, immediately following approval of the transaction by Roanoke stockholders.
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For this acquisition, Steel Dynamics paid $111 million in cash, issued 4,544,360 shares of registered Steel Dynamics common stock and assumed $45 million in Roanoke debt, which the company intends to retire within the next few days.
With the addition of Roanoke Electric’s assets, Steel Dynamics will now operate five EAF-based minimills, five joist and decking fabrication plants, and two scrap-metal processing facilities. Steel products will include flat-rolled, merchant bar, engineered bar, and light structural steels as well as wide-flange beams and rail.
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Roanoke stockholders received $9.75 in cash and 0.4 shares of SDI common stock for each share of Roanoke stock outstanding at the effective date of the merger. Based on 11,360,901 Roanoke shares outstanding prior to the close of the transaction, Steel Dynamics paid $111 million in cash, issued 4,544,360 shares of registered Steel Dynamics common stock and assumed $45 million in Roanoke debt, which the company intends to retire within the next few days. The cash portion of the purchase price was funded from the company's current cash on hand. After giving effect to the issuance of shares related to this transaction, Steel Dynamics will have a total of 48,611,177 shares of common stock outstanding.
The combined companies will now operate five electric-furnace minimills with annual production capacity of approximately 5 million tons. Steel products will include flat-rolled, merchant bar, engineered bar, and light structural steels as well as wide-flange beams and rail. In addition, the company will now operate five facilities that fabricate steel joists and decking used in non-residential construction and two scrap-metal processing facilities. Steel Dynamics now operates facilities in the states of Indiana, Virginia, West Virginia, South Carolina, Florida, Ohio, and Tennessee.
Keith Busse, President and CEO of Steel Dynamics said, "We believe this acquisition will significantly broaden our steel product offerings and give us a much stronger platform to serve our joist-and-deck customers. We will begin immediately to invest in the joist-and-deck operations to improve their productivity and product capabilities. We see excellent prospects for continued volume growth in this segment of our business. At the same time, we expect to make capital improvements in the Roanoke steel-producing facilities to improve efficiency and ultimately to support higher volumes of production.
"We welcome Roanoke's employees to Steel Dynamics and are confident that they will become strong contributors to Steel Dynamics' continued growth and success," Busse concluded.