Gibraltar Acquires United Steel Products Company
2 June 1998
Gibraltar Acquires United Steel Products Company
The Company is the Nation's Second Largest Manufacturer of Steel Lumber
Connectors; Acquisition is Gibraltar's Third in Four Months
BUFFALO, N.Y., June 2 -- Gibraltar Steel Corporation
today announced that it has acquired United Steel Products
Company, a Montgomery, Minnesota-based, family-owned manufacturer of metal
building products for approximately $24 million in cash. Gibraltar also
repaid approximately $11 million of United Steel Products bank indebtedness.
The acquisition was financed by Gibraltar's credit facility, which was
recently increased to $235 million.
United Steel Products, formed in 1954, had sales of $40 million during its
fiscal year ended March 31, 1998, and employs nearly 500 people. The company,
which produces nearly 3,000 finished parts that are sold to the residential
and commercial building industries, is the nation's second largest
manufacturer of steel lumber connectors. It operates four
manufacturing/warehouse facilities totaling approximately 280,000 square feet,
located in Livermore, California; Montgomery, Minnesota; North Wilkesboro,
North Carolina; and Hainesport, New Jersey.
"This acquisition is another important step in our strategy to build on
our core steel processing competencies, while diversifying our product and
geographic coverage, and moving into higher value-added and higher-margin
steel processing activities. And like all of our acquisitions, we anticipate
that it will immediately enhance our earnings per share," said Brian J. Lipke,
Chairman and Chief Executive Officer.
"The strategic acquisition of United Steel Products strengthens our
consumer and commercial building products business, which will now generate
annual revenue approximating $300 million. It broadens our product line,
substantially extends our geographic reach by giving us our first
manufacturing and distribution facility on the West Coast, and further
diversifies and builds our customer base. We believe we can accelerate our
growth in this part of our business as we continue to generate purchasing,
manufacturing, sales and marketing, and other synergies," said Mr. Lipke.
"Another valuable component of the United Steel Products acquisition is
its joint venture with Mitek, which is the world's leading truss plate
manufacturer. Mitek has annual sales of approximately $200 million, and
enjoys an excellent reputation in the market. We look forward to building the
relationship between Gibraltar and Mitek.
"Our three acquisitions in 1998 -- The Solar Group (March), Appleton
Supply Company (April), and United Steel Products (June) -- have increased our
1997 sales base by more than $100 million. Because all three companies
manufacture high value-added, high-margin products, we continue to strengthen
and improve our margins," said Mr. Lipke.
"The United Steel Products acquisition is our third in 1998 and our fifth
in the last 17 months. We are actively evaluating many other acquisition
candidates, and will continue to be very selective and only acquire those
companies that meet our strict criteria with established records of
profitability and growth. We want proven and experienced management teams
that will stay in place and work with us to accelerate their growth, which has
been the case with every acquisition we've made since 1987," said Mr. Lipke.
Information contained in this release, other than historical information,
should be considered forward-looking, and may be subject to a number of risk
factors, including: the impact of changing steel prices on the Company's
results of operations; changing demand for the Company's products; and changes
in interest or tax rates.
Gibraltar is a growth-oriented company and a leader in the intermediate
steel processing industry, specializing in high value-added, high-margin
processes and services. It provides steel products and related services to
approximately 8,000 customers in the automotive, automotive supply,
building/construction, consumer products, steel, machinery, and appliance
industries, among others.
The Company uses more than 20 different processes and services to produce,
manufacture, and distribute high-quality steel products such as cold-rolled
strip steel; heavy-duty steel strapping; galvanized, Galvalume(R), and
prepainted sheet steel; and a wide array of building products for the consumer
and commercial markets. Gibraltar also provides specialized heat-treating
services of customer-owned parts and materials; operates state-of-the-art
materials management facilities; and through its joint venture partnership,
provides steel pickling.