Reliance Steel & Aluminum Co. Acquires Cooksey Iron & Metal Co., Inc.

Rhea-AI Summary

Reliance Steel & Aluminum Co. (RS) has acquired Cooksey Iron & Metal Co., Inc., a metals service center in Georgia, Florida, Alabama, and South Carolina. Cooksey, founded in 1917, operates three locations and services various industries. The acquisition aims to strengthen Reliance's position in the Southeastern market and promote further growth in Cooksey's value-added processing capabilities. Cooksey's annual net sales for 2023 were approximately $90 million.

Market Research Analyst

The acquisition of Cooksey Iron & Metal Co. by Reliance Steel & Aluminum Co. represents a strategic expansion into the Southeastern market. This move is indicative of Reliance's commitment to diversifying its geographic footprint and customer base. By incorporating Cooksey's established presence and robust sales figures, which were reported at approximately $90 million for the past year, Reliance is poised to leverage existing relationships within key industries such as agriculture and construction.

It is essential to evaluate the market share implications of this acquisition. Given the undisclosed terms of the transaction, it is challenging to assess the immediate financial impact on Reliance's balance sheet. However, the long-term benefits could include increased market penetration, enhanced economies of scale and the potential for improved bargaining power with suppliers and customers. The retention of Cooksey's management team suggests a smooth transition and the preservation of operational expertise.

Financial Analyst

From a financial perspective, the acquisition of Cooksey by Reliance Steel & Aluminum Co. should be examined in terms of capital allocation and return on investment. While the terms of the transaction are not public, investors should monitor the integration costs and how the acquisition is financed, whether through debt or cash reserves, as this will affect the company's leverage and liquidity ratios.

Reliance's strategic focus on value-added processing capabilities could potentially lead to margin expansion. The acquisition may also result in cost synergies, reducing overall operational expenses. Investors should look for future financial statements and earnings calls for indications of accretion to earnings per share and updates on synergy realization.

Metals Industry Expert

The metals service center industry is highly competitive, with success often driven by distribution efficiency and product quality. Cooksey's reputation for premium customer service and rapid delivery aligns with Reliance's operational model, suggesting a cultural and business fit that could benefit both entities. The emphasis on value-added processing capabilities is particularly noteworthy, as it indicates a strategic move towards higher-margin services, which could differentiate Reliance in a commoditized market.

Furthermore, the Southeastern market is experiencing growth, partly due to increased infrastructure spending and a booming manufacturing sector. By acquiring a well-established player like Cooksey, Reliance not only gains immediate access to this market but also inherits a customer base that could provide a stable revenue stream and opportunities for cross-selling services.

SCOTTSDALE, Ariz., Feb. 02, 2024 (GLOBE NEWSWIRE) -- Reliance Steel & Aluminum Co. (NYSE: RS) announced that it has acquired all the outstanding equity interests of Cooksey Iron & Metal Co., Inc. (“Cooksey”), a metals service center that processes and distributes finished steel products, including tubing, beams, plates and bars. Headquartered in Tifton, Georgia and founded in 1917, Cooksey operates three locations, servicing a diverse range of customers including trailer manufacturers, metal building fabricators, agricultural equipment manufacturers, structural fabricators, machine shops and others in Georgia, Florida, Alabama and South Carolina. Cooksey will operate as a subsidiary of Metals USA, a wholly owned subsidiary of Reliance. The current management team will remain in place. For the twelve months ended December 31, 2023, annual net sales for Cooksey were approximately $90 million. The terms of the transaction were not disclosed.

“We are very excited to welcome Cooksey to the Reliance family,” commented Karla Lewis, President and Chief Executive Officer of Reliance. “The addition of Cooksey strengthens and expands our position in the fast-growing Southeastern market where the Company is well-known for its premium customer service, quality products, and rapid delivery standards which is in direct alignment with the Reliance model. Cooksey will further benefit from Reliance’s significant wealth of knowledge throughout the family of companies and investments to promote further growth in its value-added processing capabilities.”

About Reliance Steel & Aluminum Co.
Founded in 1939, Reliance Steel & Aluminum Co. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of approximately 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 2022, Reliance’s average order size was $3,670, approximately 50% of orders included value-added processing and approximately 40% of orders were delivered within 24 hours. Reliance Steel & Aluminum Co.’s press releases and additional information are available on the Company’s website at rsac.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 Cooksey and discussions of Reliance’s future performance. Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance. The expected benefits of the transaction may not materialize as expected. 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 our most recent Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) and subsequent reports. 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.

CONTACT:         
(213) 576-2428
investor@rsac.com

or Addo Investor Relations
(310) 829-5400

 

What company acquired Cooksey Iron & Metal Co., Inc.?

Reliance Steel & Aluminum Co. (NYSE: RS)

Where is Cooksey Iron & Metal Co., Inc. headquartered?

Tifton, Georgia

What is the annual net sales for Cooksey Iron & Metal Co., Inc. for 2023?

Approximately $90 million

What is the purpose of the acquisition of Cooksey Iron & Metal Co., Inc. by Reliance Steel & Aluminum Co.?

To strengthen Reliance's position in the Southeastern market and promote further growth in Cooksey's value-added processing capabilities