Steel Dynamics, Inc. has completed the previously announced acquisition of OmniSource Corp., a privately owned scrap metal recycling company. Steel Dynamics paid about $1.1 billion for the company including $425 million in cash, 9.7 million shares of Steel Dynamics, Inc. common stock valued at $451 million, and the assumption of about $220 million of debt.
"We are very pleased to welcome OmniSource management and employees to the Steel Dynamics family," said Keith Busse, chairman and CEO of Steel Dynamics. "OmniSource becomes an important operating unit, providing significant additional diversification to our business model and offering our shareholders value by facilitating potential future growth in our steel businesses.
"With regard to the acquisition of OmniSource, we want to clarify that OmniSource will continue to operate much like it has in the past as it expects to maintain its business relationships with a long list of scrap providers and continue to supply ferrous and non-ferrous resources to a wide range of customers, including foundries and steel mills. For our part, Steel Dynamics expects to continue to purchase scrap from numerous scrap vendors with whom we have developed strong relationships."
Last year Steel Dynamics purchased 516,000 tons of ferrous scrap from OmniSource, accounting for about 10 percent of OmniSource's ferrous scrap generation and 14 percent of SDI’s scrap purchases.
SDI expects that over time the amount of scrap it takes in from OmniSource will grow, but Busse says that company does not expect OmniSource to supply only SDI or SDI obtaining all its scrap from OmniSource.
With the acquisition, Danny Rifkin, formerly president and CEO of OmniSource, was named executive VP of Steel Dynamics. He will also serve as president and COO of the OmniSource subsidiary of Steel Dynamics. He also will join SDI’s board of directors.
Effective with the acquisition of OmniSource Corporation, SDI's existing scrap operations in Virginia, Tennessee, and Indiana will be transitioned to OmniSource.