NEW YORK - Reliance, Inc. (NYSE: RS), a leading metal solutions provider, has completed the acquisition of Ohio-based Mid-West Materials, Inc., a flat-rolled steel service center. The acquisition, announced today, is part of Reliance's strategic expansion to enhance its presence in the flat-rolled steel market, particularly in the Midwest region which services North American Original Equipment Manufacturers (OEMs).
Mid-West Materials, established in 1952 and headquartered in Perry, OH, supplies a variety of steel products, including hot-rolled, coated, and cold-rolled steel, catering to industries such as trailer manufacturing, agriculture, and metal fabrication. The company reported net sales of approximately $87 million for the twelve months ending December 31, 2023. The financial terms of the transaction were not disclosed.
Karla Lewis, President and Chief Executive Officer of Reliance, expressed confidence in the acquisition, noting that Mid-West Materials' business model and emphasis on customer service align with Reliance's own values and operational approach. Lewis underscored that the newly acquired company would benefit from Reliance's scale, access to capital, and the broader expertise available within its extensive network of companies.
The management team at Mid-West Materials will continue to lead the company post-acquisition, ensuring continuity of service and expertise. Reliance anticipates that the addition of Mid-West Materials will be immediately accretive to earnings and will expand the company's product offerings and processing capabilities.
Reliance, Inc., founded in 1939, is North America's largest metals service center company, operating a network of over 315 locations across 40 states and 12 countries outside the United States. The company is known for its focus on small orders, quick turnaround, and value-added processing services. In 2023, Reliance reported that its average order size was $3,210, with a significant portion of orders involving value-added processing and nearly half of the orders delivered within 24 hours.
This acquisition is based on a press release statement by Reliance, Inc. and includes forward-looking statements that involve risks and uncertainties. The anticipated benefits of the transaction may not fully materialize as expected, and actual results could differ materially from projections.
InvestingPro Insights
As Reliance, Inc. (NYSE: RS) solidifies its position in the flat-rolled steel market with the strategic acquisition of Mid-West Materials, Inc., the financial health and market performance of Reliance offer key insights into the potential future success of this consolidation. With a robust market capitalization of $19.13 billion, Reliance stands as a significant player in the metal solutions industry.
InvestingPro data reveals a Price/Earnings (P/E) ratio of 14.61, which adjusts slightly to 14.32 when considering the last twelve months as of Q4 2023. This metric suggests a reasonable valuation of the company relative to its earnings. Furthermore, the company’s Gross Profit Margin for the same period stood at 30.71%, indicating a solid profitability ratio that could bode well for integrating Mid-West Materials' operations.
InvestingPro Tips highlight the company's Price % of 52 Week High at an impressive 98.82%, showcasing near-peak stock performance. This, combined with a one-year price total return of 31.71%, underscores the market's positive reception of Reliance’s growth strategies and operational efficiency.
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