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Reliance Steel & Aluminum To Buy Metals USA For About $1.2 Bln - Quick Facts

Reliance Steel & Aluminum Co. (RS) announced Wednesday that it agreed to acquire Metals USA Holdings Corp. (MUSA) for $20.65 per share in cash, representing an enterprise value of approximately $1.2 billion.

Reliance and Metals USA's Boards have unanimously approved the transaction.

The transaction is subject to approval by Metals USA stockholders, along with the receipt of regulatory clearances and the satisfaction of other customary closing conditions, and includes a 30-day "go-shop" period.

David Hannah, Chairman and Chief Executive Officer of Reliance, will continue as Chairman and Chief Executive Officer of the combined company.

Lourenco Goncalves, Chairman, President and Chief Executive Officer of Metals USA will retire upon closing of the transaction.

Reliance said it plans to operate Metals USA under its current brand names.

Reliance noted that it expects to fund the transaction and refinance Metals USA's existing indebtedness from Reliance's existing $1.5 billion credit facility, together with funds from accessing the bank credit markets, as well as the debt capital markets.

The merger agreement permits Metals USA to solicit alternative acquisition proposals from third parties through March 8, 2013, and Metals USA intends to do so with the assistance of its financial and legal advisors.

If the merger agreement is terminated under certain circumstances relating to an alternative transaction, Reliance will be entitled to receive a termination fee from Metals USA.

Investment funds affiliated with Apollo Global Management, LLC (APO), which own approximately 53% of the outstanding shares of Metals USA common stock, have entered into a Voting Agreement pursuant to which they have agreed to vote in favor of the merger.

Metals USA's assets at December 31, 2012 and sales for the year then ended were approximately $1.0 billion and $2.0 billion, respectively. Upon completion of the acquisition, Reliance will have total assets of over $6.5 billion and annual sales of over $10.0 billion.

The transaction is expected to close in the second quarter of 2013.

by RTT Staff Writer

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