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Reliance, Inc. Completes Acquisition of American Alloy Steel, Inc.

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Reliance, Inc. (RS) completed the acquisition of American Alloy Steel, Inc., a leading distributor of specialty carbon and alloy steel plate and round bar. The deal enhances Reliance's value-added processing capabilities and expands its product portfolio. American Alloy's annual net sales were around $310 million for the twelve months ended December 31, 2023.
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The acquisition of American Alloy by Reliance represents a strategic move to bolster its position in the specialty steel distribution market. By integrating American Alloy's expertise and product offerings, Reliance is poised to enhance its value-added processing and product diversification. This is significant because value-added services can drive higher profit margins by providing customized solutions to clients. Moreover, expanding the product portfolio allows Reliance to tap into new market segments and customer bases, potentially leading to increased market share.

It is also noteworthy that the acquisition is described as immediately accretive, which implies that it is expected to contribute positively to Reliance's earnings from the get-go. This is a positive signal to investors, as it suggests a well-calculated financial move with immediate benefits to the bottom line. However, without disclosed transaction terms, it is challenging to assess the full financial impact and potential risks associated with the deal.

Reliance's acquisition of American Alloy, with its annual net sales of approximately $310 million, suggests a considerable increase in Reliance's revenue stream. The retention of American Alloy's management team is a prudent step to ensure operational continuity and to retain the institutional knowledge that has contributed to American Alloy's success. From a financial perspective, the undisclosed terms of the transaction raise questions about the acquisition's cost and how it was financed—whether through cash, debt, or stock issuance—which could affect Reliance's financial leverage and earnings per share.

Investors will be keen on understanding how this acquisition will impact Reliance's future earnings guidance and whether economies of scale can be achieved. The integration process will be critical to realize synergies and cost savings, which in turn could provide a boost to Reliance's profitability and stock performance in the long run.

From a supply chain perspective, the acquisition of American Alloy could lead to enhanced supply chain efficiencies for Reliance. Specialized in the distribution of carbon and alloy steel, including PVQ material, American Alloy's integration could provide Reliance with a competitive edge in sourcing and distributing niche products. The ability to offer a wider range of products, including those that meet the stringent requirements of pressure vessels, positions Reliance to better serve industries such as oil and gas, which are heavily reliant on PVQ grade materials.

Supply chain resilience is increasingly important and this acquisition may contribute to a more robust and diversified supply chain for Reliance. However, the challenge lies in effectively integrating the logistics, inventory management and customer service systems to ensure a seamless transition for customers and to leverage the full potential of the combined entity's supply chain capabilities.

SCOTTSDALE, Ariz., April 03, 2024 (GLOBE NEWSWIRE) -- Reliance, Inc. (NYSE: RS) announced that effective April 1, 2024, it has completed its acquisition of all of the outstanding equity interests and related real estate assets of American Alloy Steel, Inc. (“American Alloy”). Headquartered in Houston, Texas and founded in 1971, American Alloy is a leading distributor of specialty carbon and alloy steel plate and round bar, including pressure vessel quality (PVQ) material. The acquisition of American Alloy increases Reliance’s value-added processing and fabrication capabilities and expands the Company’s specialty carbon steel plate product portfolio.

This transaction fits within Reliance’s acquisition strategy of acquiring immediately accretive companies with strong management teams. The current American Alloy team, including management, will remain in place. For the twelve months ended December 31, 2023, annual net sales for American Alloy were approximately $310 million. The terms of the transaction were not disclosed.

About Reliance, Inc.
Founded in 1939, Reliance, Inc. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of more than 315 locations in 40 states and 12 countries outside of the United States, Reliance provides value-added metals processing services and distributes a full-line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance focuses on small orders with quick turnaround and value-added processing services. In 2023, Reliance’s average order size was $3,210, approximately 51% of orders included value-added processing and approximately 40% of orders were delivered within 24 hours. Reliance, Inc.’s press releases and additional information are available on the Company’s website at reliance.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expect,” “anticipate,” “believe,” and similar words. These forward-looking statements may include statements concerning Reliance’s acquisition of American Alloy and discussions of Reliance’s future performance. Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance. Actual outcomes and results may differ materially from these forward-looking statements as a result of various important factors, including, but not limited to, those disclosed in reports Reliance has filed with the United States Securities and Exchange Commission (the “SEC”). Risks and uncertainties related to the American Alloy transaction include, but are not limited to, the possibility that the expected benefits of the transaction may not materialize as expected; disruption to existing business and operational relationships; and the failure to successfully integrate the acquired company. These forward-looking statements are based on management's expectations and assumptions as of today’s date and Reliance disclaims any obligation to publicly update or revise any forward-looking statements. Important risks and uncertainties about Reliance’s business can be found in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

CONTACT:

(213) 576-2428
investor@reliance.com

or Addo Investor Relations
(310) 829-5400


Reliance announced the completion of its acquisition of American Alloy Steel, Inc.

American Alloy specializes in distributing specialty carbon and alloy steel plate and round bar.

The acquisition enhances Reliance's value-added processing and fabrication capabilities and expands its specialty carbon steel plate product portfolio.

American Alloy's annual net sales were approximately $310 million.

American Alloy is headquartered in Houston, Texas.
Reliance Steel & Aluminum Co.

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About RS

reliance steel & aluminum co. (nyse:rs) headquartered in los angeles, california, is the largest metals service center company in north america. through a network of more than 300 locations in 39 states and 12 countries outside of the united states, the company provides value-added metals processing services and distributes a full line of over 100,000 metal products. these products include galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium and alloy steel sold to more than 125,000 customers in a broad range of industries. some of these metals service centers provide processing services for specialty metals only. in the mid-1970's, the company began to establish specialty metals centers stocked with inventories of selected metals and equipped with automated materials handling and precision cutting equipment. beginning in the early 1990's, owners of successful service center companies started to sell these companies as they were reaching re