"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," stated Mark D. Millett,
President and Chief Executive Officer. "A strategy intended to reduce volatility
during both strong and weak market cycles, given steel raw material supply
optionality. During weak steel demand environments 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."
The transaction is valued at approximately 5.0 times trailing twelve month
March 31, 2016 EBITDA, excluding potential income tax-related benefits. The
transaction is subject to customary conditions and receipt of regulatory
approvals. Steel Dynamics expects to obtain all necessary regulatory approvals
and complete the transaction by August 2016.
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