United Kingdom-based GFG Alliance has signed an agreement to purchase Texas-based Keystone Consolidated Industries Inc. (KCI) from Contran Corp.
Under terms of the deal, GFG Alliance’s Liberty Steel USA will acquire KCI, including all its subsidiaries, for $320 million. The purchase is expected to close by Dec. 31.
According to a press release, Peoria, Illinois-based Keystone Steel and Wire recently posted its strongest results in its 100-year history in the steel and steel products business.
The acquisition adds a wire rod facility with an electric arc furnace (EAF), RedBrand agricultural fence products, industrial wire, a bar mill, three welded wire reinforcement mesh facilities and a PC strand facility to the Liberty Steel USA family.
“The Keystone acquisition is a core part of GFG’s Greensteel vision to become a leading U.S. producer of high-quality, cleanly produced steel,” says Sanjeev Gupta, executive chairman of Liberty and the GFG Alliance. “As we look ahead to the future, GFG will benefit from Keystone’s century-long history, its robust operations and its reputation for producing top quality steel.”
The merger combines the existing South Carolina-based Liberty Steel Georgetown steel plant with a valuable downstream business and more than 1,3000 employees, according to the release. The combined company will now have operations in Illinois, Ohio, South Carolina, New Mexico, Texas and Georgia.
GFG says the deal is financed by two large North American banks with funds managed by BlackRock Financial Management Inc. GFG will contribute equity and its Liberty Steel Georgetown plant to the transaction.
“KCI and its businesses offer Liberty the chance to merge our existing U.S. steel business with one of the country’s most productive wire rod operations,” says GFG North American CIO Grant Quasha. “Combined with Liberty Steel Georgetown, KCI will increase our downstream capabilities, create critical synergies, add strong management and provide better value and products for customers as we advance our U.S. steel business.”
GFG acquired Liberty Steel Georgetown at the end of 2017 from ArcelorMittal. The plant reopened in June 2018 and has been steadily ramping up production.
More than 100 employees have been rehired at the site. GFG Alliance has recruited more than 50 new employees, revitalized the facility and has "re-established its reputation to be the premier producer of high carbon wire rod in the U.S."
KCI and Liberty Steel Georgetown will form the core of GFG’s North American business with further expansion in the coming months.
GFG Alliance says it is actively pursuing additional acquisitions in flat products and further downstream capabilities to drive capacity by 2020.