Black Diamond Capital Management exits steel maker for $475m

The Greenwich-based firm, currently investing its second distressed debt fund, has sold Bayou Steel to global steel giant ArcelorMittal.

Black Diamond Capital Management (BDCM) has sold portfolio company Bayou Steel for $475 million EUR to global steel giant ArcelorMittal.

The Greenwich-based firm, which manages two distressed debt and special situation funds, scooped up Bayou Steel out of bankruptcy in 2006 for $184 million.

BDCM declined to comment.

Bayou Steel owns and operates steel recycling plants in LaPlace, Louisiana and Harriman, Tennessee. The company melts scrap steel in electric furnaces and casts it into a variety of products.

Bayou Steel, which employs 630 people, also operates an automobile shredder at its Louisiana facility and owns four stocking locations for its products across the southern US.  

Last year, the firm generated revenues of roughly $331 million while producing 510,000 tons of finished steel.

Greenwich-based BDCM operates two distressed debt and special situations private equity funds in addition to hedge funds and other structured alternatives vehicles. Last year, the firm closed its second distressed debt fund on $982 million, surpassing its original target of $750 million.

CP Eaton Partners acted as placement agent for that fund.

BDCM co-founder James Zenni left the firm in 2006 to start his own alternative investment group, Z Capital Partners, taking six BDCM associates with him. As of last year, BDCM managed roughly $10 billion in assets.