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Charlotte Company Acquires Steel Distribution Business

| Jun 22, 2012 | Business Formation & Planning |

Nucor Corp., a steel production company based in Charlotte, recently acquired Skyline Steel LLC, a steel distribution business based in New Jersey, for $605 million.

Nucor, the largest steel fabricator in the country, employs over 20,000 people. During the first quarter of 2012, Nucor reported profits of $145 million. Reportedly, it expects its profits to increase following the acquisition, although its earnings for the second quarter of 2012 were down somewhat from expectations.

Skyline primarily works with steel used in the construction of highways, bridges and underground parking garages. Nucor focuses on manufacturing steel products, such as structural bars, steel plates and recycled scrap. An equity analyst familiar with both companies believes the pairing will benefit Nucor, as the products manufactured by Skyline align with Nucor’s business. Further, the analyst indicated the purchase price appeared sensible when compared to Skyline’s disclosed earnings.

Nucor acquired the company from ArcelorMittal, a steel company out of Luxembourg. Following the acquisition, Skyline will maintain its headquarters in New Jersey; however, it is now considered a subsidiary of Nucor.

As the construction industry continues to be hard hit by the economic downturn, Nucor is anticipating the acquisition will help jumpstart its profits in the coming year.

Clearly, the acquisition of a company, whether large or small, is extremely complicated with many technical details best left to the experts. Consulting with a knowledgeable business attorney is one way for those who are considering buying or selling a business to ensure all of their bases are covered before proceeding with the transaction.

Source: Charlotte Observer, “Nucor acquires steel distributor in $605M deal,” Victoria Guida,” June 21, 2012.

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