Wired News – Commercial Metals Acquires US-Based Rebar Assets from Brazilian Steelmaker Gerdau

Stock Monitor: Gerdau Post Earnings Reporting

LONDON, UK / ACCESSWIRE / January 04, 2018 / Active-Investors.com has just released a free research report on Commercial Metals Co. (NYSE: CMC) ("CMC"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=CMC as the Company's latest news hit the wire. On January 02, 2018, the Company announced that it has signed an agreement with Gerdau S.A. (NYSE: GGB) to acquire certain rebar steel mill and fabrication assets in US. The all-cash acquisition is valued approximately $600 million. Register today and get access to over 1000 Free Research Reports by joining our site below:

www.active-investors.com/registration-sg

>Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Commercial Metals and Gerdau S.A. most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=CMC

www.active-investors.com/registration-sg/?symbol=GGB

Commenting on the acquisition of Gerdau's US based assets, Barbara Smith, President and CEO of CMC, said:

"This acquisition aligns with our strategy to focus on our strength in concrete reinforcing products and leverages CMC's core competencies in rebar production and value-added fabrication services to non-residential construction customers. In addition, these assets provide us the opportunity to optimize our product mix more fully in the US."

André Gerdau Johannpeter, Executive Vice-Chairman of Gerdau, added:

“we are selling the US rebar operations as part of our global transformation, in order to be more profitable in an extremely competitive steel market. This deal represents an important milestone in our strategy to reduce financial leverage and focus on better return opportunities in the markets where we operate.”

Rumors of Gerdau selling off its rebar-producing facilities in US to CMC started doing the rounds in October 2017. Gerdau had been looking at assets sale to focus on its profitable assets and divest non-core assets to reduce its debts. The rumors gained prominence after Gerdau sold off 100% of its operation in Chile in October 2017 to Chilean family-owned groups Matco and Ingeniería e Inversiones for $154 million.

Key takeaways of the transaction

CMC's acquisition includes Gerdau's 33 rebar fabrication facilities in US plus steel mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey; and Rancho Cucamonga, California. These facilities have an annual mill rolling capacity of 2.5 million tons. CMC will also absorb the 2,700-people employed at the Gerdau's facilities as a part of this deal. CMC will be paying approximately $600 million in cash for this deal; however, the amount is subject to customary purchase price adjustments. The Company has put in place long-term credit commitments of $600 million to finance the transaction. The transaction has received approvals from the Board of Directors of both CMC and Gerdau. The deal is expected to close by end of FY18 subject to receiving requisite regulatory approvals and fulfillment of other closing conditions.

Benefits of acquisition

The acquisition of Gerdau's assets allows CMC to expand its market presence in the largest construction regions in the US. The acquisition will also add to the Company's annual rebar and fabrication capacity. The deal adds incremental 2.7 million tons of melt capacity and once the deal is completed CMC's global melt capacity will be approximately 7.2 million tons. The transaction will allow CMC to position itself as a leading vertically integrated steel manufacturing and fabrication services Company and strengthen its balance sheet. the Company plans to invest in improving the efficiencies of these acquired facilities by updating them with latest innovations backed by the Company's expertise.

CMC expects that the deal will be accretive to its earnings and cash flow within the first year of closing of the transaction. The combined operations are expected to result in annual pre-tax operational synergies of approximately $40 million.

For Gerdau, the assets sale will help to concentrate on its core markets in North America and stay ahead in the competitive steel market. The funds from the assets sale will allow the Company to pay off its debt, thereby deleveraging its balance sheet.

About Commercial Metals Co.

Irving, Texas headquartered CMC has been in existence since 1915 and is a global low-cost metals recycling, manufacturing, fabricating, and trading Company. CMC and its subsidiaries manufacture, recycle, and market steel and metal products, related materials and services through a network including four electric arc furnace (EAF) mini-mills, an EAF micro mill, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, metal recycling facilities. The Company also has operations in over 12 countries worldwide.

About Gerdau S.A.

Gerdau is a leading producer of long steel in the Americas and one of the leading global suppliers of special steel. The Company was founded in 1901 and is based in Porto Alegre, Brazil. The Company produces flat steel and iron ore in Brazil. In Latin America, the Company is one of the largest recycler of scrap steel and globally transforms millions of tonnes of steel scrap into steel every year. It has operations in over 14 countries across Americas, Europe, and Asia and has a combined installed capacity of over 25 million tonnes of steel annually.

Stock Performance Snapshot

January 03, 2018 - At Wednesday's closing bell, Commercial Metals' stock climbed 6.72%, ending the trading session at $24.30.

Volume traded for the day: 6.13 million shares, which was above the 3-month average volume of 1.77 million shares.

Stock performance in the last month – up 22.91%; previous three-month period – up 26.23%; past twelve-month period – up 9.56%; and year-to-date - up 13.98%

After yesterday's close, Commercial Metals' market cap was at $2.85 billion.

Price to Earnings (P/E) ratio was at 88.69.

The stock has a dividend yield of 1.98%.

The stock is part of the Basic Materials sector, categorized under the Steel & Iron industry. This sector was up 1.1% at the end of the session.

Active-Investors:

Active-Investors (A-I) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. A-I has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles, and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

A-I has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third-party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email info@active-investors.com. Rohit Tuli, a CFA® charter-holder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by A-I. A-I is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

A-I, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. A-I, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, A-I, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither A-I nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://active-investors.com/legal-disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@active-investors.com

Phone number: 73 29 92 6381

Office Address: 6, Jalan Kia Peng, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active-Investors