Steel Products Prices North America
AZZ Completes $1.28 Billion Buy of Precoat Metals
Written by David Schollaert
May 13, 2022
AZZ Inc. completed the purchase of Precoat Metals from its parent, Sequa Corp., for approximately $1.28 billion.
The deal continues the Fort Worth, Texas-based company’s buying spree in the coated metals space.
“Today we welcome the 1,100 employees of Precoat to the AZZ family and begin the work of swiftly integrating Precoat into AZZ while leveraging the opportunities this acquisition creates.,” AZZ CEO Tom Ferguson said. “This acquisition significantly broadens our metal coatings offering, creating unrivaled scale and breadth of solutions in both the prepainted and post-fabrication coatings markets.”
Headquartered in St. Louis, Mo., Precoat is a provider of steel and aluminum coil coating solutions for the construction, appliance, heating, HVAC, container and transportation markets. Precoat’s 1,100 employees operate a network of 13 manufacturing facilities with 15 coating lines and 17 value-added processing lines. Precoat generated revenue of $700 million in 2021. The purchase price represents about 8.2x the company’s adjusted EBITDA.
This acquisition is consistent with AZZ’s plan to prioritize North American coatings and to “transition AZZ from a diverse holding company to a focused provider of coating and galvanizing services,” Ferguson said.
“We believe the coil coating market will provide sustainable future growth for AZZ,” he added.
“This is an exciting milestone for Precoat Metals, “ Precoat president Kurt Russell said. “As the Precoat business shifts from being a non-core asset to one that is a paramount strategic priority within AZZ, Precoat will have the resources needed to continue our core growth strategies.”
The transaction is expected to close in the first quarter of AZZ’s fiscal year 2023.
Other recent strategic acquisitions for AZZ include Steel Creek Galvanizing Co., a hot-dip galvanizer based in Blacksburg, S.C., and Milwaukee-based hot-dip galvanizing and zinc electroplating company Acme Galvanizing Inc. Over the past few years, AZZ also has made deals to acquire Dallas/Fort Worth-Texas based powder coating company Preferred Industries; Jasper, Tenn.-based galvanizer Tennessee Galvanizing; and electroplating company NuZinc, also located in the Dallas-Fort Worth area.
Sequa is a portfolio company of global investment firm Carlyle, is a diversified industrial company with operations in the aerospace, energy and metal coatings industries through its Chromalloy and Precoat Metals business units.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
Read more from David SchollaertLatest in Steel Products Prices North America
SMU Price Ranges: Sheet and plate steady ahead of Independence Day
Sheet and plate prices were little changed in the shortened week ahead of Independence Day, according to SMU’s latest check of the market.
Nucor maintains plate prices, opens August order book
Nucor aims to keep plate prices flat again with the opening of its August order book.
Nucor CSP remains level at $900/ton
Nucor maintained its weekly list price for hot-rolled (HR) coil this week, following two consecutive increases.
Cliffs raises prices, seeks $950/ton for July spot HR
Cleveland-Cliffs plans to increase prices for hot-rolled (HR) coil to $950 per short ton (st) with the opening of its July spot order book. The Cleveland-based steelmaker said the price hike was effective immediately in a letter to customers dated Monday.
HRC vs. prime scrap spread widens in June
The price spread between HRC and prime scrap widened in June.