BlueScope Purchasing Coil Coatings Business From Cornerstone Building Brands
Kansas City, MO - BlueScope announces that it has entered into a binding agreement to acquire the Coil Coatings business from Cornerstone Building Brands Inc. (NYSE:CNR) for $500 million (U.S.), subject to customary adjustments. Coil Coatings (including
the Metal Coaters and Metal Prep brands) is the second largest metal coater in the U.S., with a total capacity of around 900,000 tons per annum across seven facilities, predominantly serving commercial and industrial construction applications.
BlueScope Managing Director and CEO Mark Vassella said, “The acquisition of Coil Coatings is a significant step forward in our growth plans for North America. It almost triples our U.S. metallic coating and painting capacity to over 1.3 million
metric tons per annum, from around 475,000 tons per annum at present, and gives us immediate and direct access to the large and growing Eastern U.S. region.
“Following the completion of the acquisition of Coil Coatings, the $770 million (U.S.) investment in the expansion of North Star, the $220 million (U.S.) establishment of BlueScope Recycling and the continued investment in the BlueScope Properties
Group, the Company’s investment in North America now totals over $4.5 billion (Australian), employing more than 4,000 employees.
“As a global leader in painted steel products for building and construction applications, this deal hits our sweet spot. The Coil Coatings business complements our existing North American asset base on the West Coast (through the NS BlueScope
Coated Products Joint Venture). We had previously flagged interest in expanding painting operations into the Eastern U.S. region via a greenfield paint line. Today’s acquisition provides BlueScope with a rare opportunity to immediately fulfil
this strategic growth initiative with Coil Coatings’ outstanding portfolio of assets.
“The Coil Coatings business provides BlueScope with a significant opportunity for long-term earnings and growth through product development and branded products consistent with the BlueScope customer service and value proposition around the
globe. The acquisition also provides for further integration with BlueScope’s existing U.S. business value chain.
“BlueScope has identified operational and supply chain synergies of around $12 million (U.S.) per annum by year three, however the key focus is the medium- to longer-term opportunity the acquisition provides,” Vassella said.
The purchase price of $500 million (U.S.) represents approximately 8.9 times calendar year 2021 pro-forma EBITDA of $56 million (U.S.), including year three synergies. Following completion, Cornerstone Building Brands will remain a key customer of
the business.
The acquisition will be fully funded from cash on the balance sheet and will be immediately accretive to earnings per share. BlueScope remains in a strong position to continue to execute on its previously announced projects and on-market buy-back.
The transaction is targeted for completion in calendar year 2022, subject to regulatory approval and other customary closing conditions.
“We are excited about welcoming the Coil Coatings team to BlueScope, and for the opportunity to share and combine our operational knowledge and invest to drive safety, efficiency, branding and growth,” Vassella said.
About BlueScope Steel
BlueScope Steel supplies metallic coated and painted steel building products, and pre-engineered steel buildings. BlueScope Steel is the parent company of several major U.S. metal building and component businesses including: Butler Manufacturing, Varco Pruden, ASC Building Products, Steelscape and North Star Steel/BlueScope Steel. For more information, visit www.bluescopesteel.com.