FORT WAYNE, INDIANA, October 26, 2007 — Steel Dynamics, Inc.
(NASDAQ-GS:STLD) today announced that it has completed the previously
announced acquisition of OmniSource Corporation, a privately owned
ferrous and non-ferrous scrap processing and trading company. Steel
Dynamics paid approximately $1.1 billion for the company including $425
million in cash, 9.7 million shares of Steel Dynamics, Inc. common stock
valued at $451 million, and the assumption of approximately $220
million of debt, which was repaid on closing.
“We are very pleased to welcome OmniSource management and employees
to the Steel Dynamics family,” said Keith Busse, Chairman and CEO of
Steel Dynamics. “OmniSource becomes an important operating unit,
providing significant additional diversification to our business model
and offering our shareholders value by facilitating potential future
growth in our steel businesses. On a pro forma basis for their fiscal
year 2006, the combination of Steel Dynamics and OmniSource would have
resulted in 2006 revenues of approximately $5.4 billion.
“With regard to the acquisition of OmniSource, we want to clarify
that OmniSource will continue to operate much like it has in the past as
it expects to maintain its business relationships with a long list of
scrap providers and continue to supply ferrous and non-ferrous resources
to a wide range of customers, including foundries and steel mills. For
our part, Steel Dynamics expects to continue to purchase scrap from
numerous scrap vendors with whom we have developed strong relationships.
In 2006 Steel Dynamics purchased 516,000 tons of ferrous scrap from
OmniSource, accounting for about 10 percent of OmniSource’s ferrous
scrap generation and 14 percent of our scrap purchases. We expect these
percentages may grow somewhat over time with SDI’s growth in
steelmaking, but we have no expectation of OmniSource supplying only to
SDI or of SDI obtaining all its scrap from OmniSource. Overall, we see
OmniSource as the premier U.S. scrap processor, well-managed and
complementing Steel Dynamics well in terms of geography, scrap mix, and
operating culture,” Busse said.
Danny Rifkin, formerly President and CEO of OmniSource Corporation,
is appointed an Executive Vice President of Steel Dynamics reporting to
the Chairman and CEO. He will also serve in the capacity of President
and Chief Operating Officer of the OmniSource subsidiary of Steel
Dynamics. Rifkin has also been invited to join SDI’s Board of Directors.
Effective with the acquisition of OmniSource Corporation, SDI’s
existing scrap operations in Virginia, Tennessee, and Indiana will be
transitioned to OmniSource.
OmniSource financials will begin to be consolidated with Steel
Dynamics’ results effective at closing. The expected effect of the
OmniSource acquisition on SDI’s fourth quarter operating results will be
provided with updated guidance in December.
Forward Looking Statements
Contact:
Fred Warner, Investor Relations Manager
(260) 969-3564 or fax (260) 969-3590
f.warner@steeldynamics.com |