Reliance Steel & Aluminum Signs Deal for Metals USA Acquisition

Reliance Steel & Aluminum Co. and Metals USA Holdings Corp. (NYSE:MUSA) today announced a definitive merger agreement whereby Reliance Steel & Aluminum Co. (“Reliance”) will acquire all outstanding shares of Metals USA Holdings Corp. (“Metals USA”) for $20.65 per share in cash, representing an enterprise value of approximately $1.2 billion.

The transaction is expected to close in the second quarter of 2013. 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 has been unanimously approved by the respective Boards of Directors of Reliance and Metals USA. 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 H. 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.

Mr. Hannah commented, "We are very excited about Metals USA becoming an important part of the Reliance family of companies. This is our largest acquisition to date and will add a total of 48 service centers strategically located throughout the United States to our existing operations. Metals USA is an excellent fit and nicely complements Reliance’s existing customer base, product mix and geographic footprint. Additionally, the transaction is expected to be accretive immediately upon closing and we believe that the combined company will be well positioned to continue to outperform the broader metals service center industry."

"I am extremely proud of the company we have built,” said Mr. Goncalves. “Metals USA’s strong position in the metals service center industry will strategically enhance Reliance’s current business, and I am confident that together, our companies will continue to excel. We believe this transaction creates significant value and is in the best interest of our stockholders."

“We would like to thank Lourenco Goncalves and the rest of the employees of Metals USA for their dedication and efforts over the last several years in making Metals USA one of the premier service center businesses in the United States,” said M. Ali Rashid, Senior Partner at Apollo. “We look forward to working with the management team and our fellow directors to conclude this important transaction for Metals USA.”

Reliance plans to operate Metals USA under its current brand names. This will enable Reliance to retain Metals USA’s brand equity while allowing the combined organization to capitalize on the resources, capabilities and leading practices of each entity, benefiting all stakeholders.

Reliance 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. This expected financing will also provide additional liquidity to allow Reliance to support and continue to grow its operations. On a pro forma basis giving effect to this transaction, Reliance’s net debt-to-total capital ratio is expected to be approximately 42%, which is in line with Reliance’s targeted leverage.

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. It is not anticipated that any developments will be disclosed with regard to this process unless the Metals USA Board of Directors makes an affirmative decision to proceed with an alternative acquisition proposal. In addition, Metals USA may, subject to certain procedural limitations under the terms of the definitive merger agreement, respond to unsolicited alternative acquisition proposals subsequent to March 8, 2013. 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 (NYSE: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. Consummation of the merger requires approval by the holders of a majority of the outstanding shares of common stock of Metals USA.

Moelis & Company LLC is acting as exclusive financial advisor to Reliance. Davis Polk & Wardwell LLP is serving as Reliance’s outside legal advisor. Goldman Sachs & Co. is acting as financial advisor to Metals USA. Morgan Stanley also provided the Board of Directors of Metals USA with a fairness opinion in connection with the transaction. Wachtell, Lipton, Rosen & Katz is serving as outside legal advisor to Metals USA.

Conference Call
Reliance will host a conference call today, Wednesday, February 6, 2013 at 11:00 a.m. ET / 8:00 a.m. PT to discuss the transaction. David Hannah, Reliance Steel & Aluminum Co.'s Chairman of the Board and Chief Executive Officer, Gregg Mollins, President and Chief Operating Officer and Karla Lewis, Executive Vice President and Chief Financial Officer, will host the call. To listen to the live call by telephone, please dial (888) 267-2845 or (973) 413-6102 approximately 10 minutes prior to the start time and use the conference entry code: 8406. Additionally, a live webcast of the call will be available on Reliance Steel & Aluminum Co.’s web site at Participants are encouraged to visit the web site at least 15 minutes prior to the start of the call to register and to download and install any necessary audio software.

For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 1:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on March 6, 2013 by dialing (800) 332-6854 or (973)528-0005 and entering the conference entry code: 8406. The webcast will remain posted on the investor relations portion of Reliance’s web site at for 90 days.


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