Beverly Hills-based Platinum Equity has agreed to buy Ryerson, a distributor and processor of metals, for around $2 billion (€1.4 billion).
The Wall Street Journal reported in March that UBS Investment Bank had approached several firms about buying Ryerson, including Apollo Management and a group from ABN Amro. Platinum Equity has come out on top with its bid of $34.50 per share in cash for all outstanding shares of Ryerson’s common and convertible preferred stock.
The deal, led by Platinum’s Jacob Kotzubei, is expected to close by the fourth quarter of 2007. Ryerson can solicit superior bids until 18 August.
Ryerson will be the third company in Platinum Equity’s metal processing portfolio, following the December 2005 acquisition of ESM Group and the May 2006 purchase of PNA Group, both for undisclosed amounts.
Skadden, Arps, Slate, Meagher & Flom was legal advisor to Ryerson.
Platinum focuses on investments in the information technology, telecommunications, logistics, manufacturing and entertainment distribution sectors. The firm, led by Tom Gores, is currently in the midst of raising its second fund, which is expected to close in September. The fund will likely exceed its $1.5 billion target.
Metal companies have been popular buyout targets for the last few years. Last November, The Carlyle Group and Advent International paid $1.7 billion for H.C. Starck, the metal products business of The Bayer Group. Earlier in the year Lehman Brothers Co-Investment Partners bought a 36 percent stake in another Carlyle metals portfolio company, Firth Rixson, for an undisclosed sum.