Platinum Equity exits steel processor for $1.1bn

The Tom Gores-led firm will sell PNA Group to Reliance Steel & Aluminum, just two years after acquiring the Atlanta-based steel maker.

Platinum Equity has agreed to sell steel processor PNA Group to Reliance Steel & Aluminum for $1.1 billion (€709 million), just a little more than two years after acquiring the Atlanta-based company.

Although Platinum declined to release specific return figures generated by the sale, a statement from the Los Angeles-based firm said that “the PNA investment has been very successful for Platinum and its institutional investors.”

“We knew the business had enormous potential when we acquired it, and we were convinced that with strong leadership and the right operational focus we could turn a good company into a great one,” Platinum founder Tom Gores said in the statement.

After acquiring PNA in February 2006 for an undisclosed sum, Platinum pursued a vigorous buy-and-build strategy for the former subsidiary of tourism company TUI.

Prior to the Platinum buyout, PNA consisted of three independent business units which collectively manufactured structural beams, channels, tubes and plates, coiled and rolled steel and other structural steel products.

Under Platinum’s ownership, the company completed three major add-on acquisitions over the last two years—Metals Supply, Precision Flamecutting and Steel and Sugar Steel.

PNA increased its annual revenue from $1.2 billion in 2006 to $1.6 billion in 2007, according to the statement.