British-Indian industrialist Sanjeev Gupta's GFG Alliance on Wednesday announced the purchase of Texas-based Keystone Consolidated Industries Inc. (KCI) from Contran Corporation.
London-headquartered GFG Alliance's group company Liberty Steel USA has acquired KCI, including all its subsidiaries, for USD 320 million.
The GFG Alliance said the addition of KCI to its group company Liberty Steel USA creates one of the country's largest producers of wire rod and provides a platform for GFG to grow its US GreenSteel capacity to 5 metric tons per annum by 2020.
"Today is an exciting milestone in our ambitious journey in the United States. I warmly welcome all Keystone employees to the global GFG family," said GFG Executive chairman Sanjeev Gupta.
"The long history, strong management, excellent work force and industry position of KCI will pair well with our existing Georgetown plant and will serve as a strong base for our continued expansion to 5mmtpa of steel capacity in the region," he said.
Gupta said the year 2019 will be an exciting one for his company as it plans to continue to grow its presence across North America and access the public markets.
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The latest deal was supported by large North American banks including Wells Fargo NA and BMO Harris Bank (BMO Harris), along with funds managed by BlackRock Financial Management Inc.
GFG said it would help pave the way towards a proposed US IPO of Liberty Steel USA, which will be led by Credit Suisse.
The transaction follows closely on the completion of Liberty Aluminium's USD 500-million purchase of Dunkirk, Europe's largest aluminium smelter, which was arranged by Bank of America Merrill Lynch and a syndicate of top tier international banks.
Grant Quasha, Chief Investment Officer North America of the GFG Alliance, said: "Keystone is a high-performing, profitable asset with modern equipment, excellent downstream operations, connections to key markets, highly-skilled workers and strong managers. The company's outstanding reputation for low carbon wire rod and extensive downstream operations complement our existing expansion and revitalisation programme at our Georgetown, South Carolina plant.
"Following the expansion of Liberty's steel business in the US, we look forward to working with partners to introduce other GFG businesses to the region including GFG's extensive resources, power and financial services arms."
"I look forward to being a part of GFG's unparalleled international growth and to continue KCI's expansion of its steel and value-added operations in the US and the region."