Black Diamond Capital Management has signed an agreement with ArcelorMittal to acquire three steelmaking and finishing operations that produce and sell long carbon steel products. The acquisition is expected to close in early April.
Long carbon steel products are used in a range of industrial sectors, particularly in the construction and engineering industries. The three facilities that ArcelorMittal is selling to Black Diamond are located in LaPlace, LA; Harriman, TN; and Vinton, TX. The combined operations of the three facilities have approximately 950 employees and can produce 830,000 metric tons of crude steel and 725,000 metric tons of finished products.
The LaPlace operations collectively include a mini-mill located outside of New Orleans, a rolling mill in Harriman, TN (near Knoxville) and three barge-based product depots in Tulsa, Chicago, and Pittsburgh. These facilities are producers of light structural steel shapes and
merchant bar products. Merchant bars are commodity metal shapes such as angles, channels, flats, rounds, squares, and strips which re-converters use for shaping into different products. The LaPlace mini-mill and Harriman rolling mill were acquired in 2008 when ArcelorMittal purchased Bayou Steel.
The Vinton facility is a mini-mill located alongside the Rio Grande River near El Paso and produces rebar for the construction industry and grinding media for the mining industry. The Vinton plant was built in 1962 by Border Steel Rolling Mill Company and was acquired by ArcelorMittal in 2007.
Black Diamond has a history of investing in the metals sector and views the facilities as a strong platform for growth in the steelmaking industry. “These facilities operated as a part of independent companies in the past and we look forward to coupling that entrepreneurial background with Black Diamond’s prior experience to expand the customer and product base,” said Stephen Deckoff, Founder and Managing Principal of Black Diamond.
In October 2015, Black Diamond held a final close of its latest fund – BDCM Opportunity Fund IV, LP – at the hard cap of $1.5 billion. Black Diamond invests in performing and distressed markets and target companies can be active in a range of industries. The firm was founded in 1995 and has offices in Greenwich, CT; Lake Forest, IL; and London, UK (www.bdcm.com).
Specialty investment bank Calibre Group (www.calibregroupllc.com) provided union related advisory services in connection with this acquisition and Jones Walker (www.joneswalker.com) provided legal counsel.
ArcelorMittal is the world’s largest steel and mining company. In 2015, ArcelorMittal had sales of $64 billion, steel shipments of 93 million net tons and crude steel production of 102 million net tons. The company has approximately 222,000 employees and steelmaking operations in 19 countries on four continents (www.arcelormittal.com).
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-24-16