Reliance Steel & Aluminum Co. on Wednesday said it completed the acquisition of Continental Alloys & Services Inc. and certain affiliated companies in a deal now valued at $415 million.
Continental Alloys of Houston, which makes products for the oil and gas industry, will operate as a subsidiary of Reliance Steel of Los Angeles, which is considered North America’s largest operator of metal service centers.
When the deal was announced last month, the companies did not disclose financial terms. Continental and its affiliates had unaudited, combined net sales of about $196 million for the six months ended June 30.
“Continental is a higher margin business than a general line service center and was valued consistently with our historic approach, and falls within an EBITDA (earnings before interest, taxes, depreciation, and amortization) range of four to six times based on our estimate of normalized earnings,” Reliance Chief Executive David H. Hannah said in a statement.
Current management will remain in place, with Dale Benditz serving as chief executive officer and David Sapunjis serving as president.
Shares closed down 14 cents, or less than 1 percent, to $45.65 on the New York Stock Exchange.
