Friday | 01 July, 2016 | 9:13 am

Strategic acquisition

By Corinna Petry

Steel Dynamics to acquire Vulcan Threaded Products to expand SBQ finishing capabilities

July 1, 2016 - Steel Dynamics Inc., the Fort Wayne, Indiana-based steel producer and recycler, has agreed to acquire Vulcan Threaded Products Inc., Pelham, Alabama, for $126 million.

Vulcan manufactures and distributes threaded steel rod products, cold-drawn and heat-treated steel bar. 

“During 2015, we identified the pursuit of higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes, as one of our target growth objectives,” SDI President and CEO Mark D. Millett says. SDI is employing a strategy “meant to reduce volatility during both strong and weak market cycles, given steel raw material supply optionality.”

During weak steel demand environments, he continues, “these businesses could purchase steel internally from our own mills, thus increasing SDI's steel mill utilization. As a consumer of special-bar-quality products currently produced at our Engineered Bar Products Division, Vulcan depicts this model perfectly and fits well within our core operating strengths."

Vulcan’s product line is evenly distributed amongst threaded steel rod, cold-finished bar processing and heat-treated bar. It shipped 89,000 tons of long products during the 12 months ended March 31. Historically, Vulcan has purchased nearly 20,000 tons of steel from SDI. Based on capabilities, SDI foresees this internal volume could grow in the near term to between 30,000 and 50,000 tons, or just under 10 percent of the Engineered Bar Division’s total 2015 shipments. MM

photo: Green Bay Manufacturing

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