Private Equity News & Analysis

Carlyle sells pipe maker to Russian steel giant for $3.53bn

The private equity firm purchased the company, John Maneely, for roughly $500m in 2006 and then merged it later that year with a Canadian steel company in a $1.5bn deal. During Carlyle's ownership, the company increased sales from $2.2bn to $3bn.

-

The Carlyle Group has sold steel pipe and tube manufacturer John Maneely Company (JMC) to Russian steel company Novolipetsk Steel (NLMK) for $3.53 billion (€2.37 billion).

Carlyle acquired then New Jersey-based JMC in 2006 for roughly $500 million, investing from its $7.85 billion buyout vehicle Carlyle Partners IV. That same year, the Washington DC-based firm merged JMC with Ontario, Canada-based steel tube specialist Atlas Tube in a deal valued at approximately $1.5 billion.

Subject to regulatory approval, publicly-listed NLMK will acquire JMC on a debt free, cash free basis in the fourth quarter of this year. The transaction will be financed from available bank commitments, including the recently established $1.6 billion Pre Export Finance facility and a $2 billion bridge commitment provided by Merrill Lynch, Deutsche Bank and Societe Generale.

Ohio-based JMC manufactures three primary steel product lines: hollow structural sections, standard pipe and electrical conduit.

The company operates 11 plants in five U.S. states and one Canadian province and has a total production capacity of more than three million tons of steel pipe and tube per annum.

During Carlyle’s ownership, the JMC sales have increased 36 percent, from $2.2 billion in 2006 to $3 billion in 2008, according to a statement from Carlyle.