Reliance Steel secures $2 bn credit for acquisition of Metals USA

Reliance Steel & Aluminum Co on Friday announced an enhanced $2 billion financing deal for its acquisition of Metals USA Holding Corp. The company said it has amended and restated its existing $1.5 billion unsecured revolving credit facility and raised $500 million in a new term loan.

The credit agreement has a term of five years, expiring 4 April 2018 and includes an increase option of the $1.5 billion credit revolving credit facility for up to an additional $500 million. Both facilities allow for prepayments, the company said.

Reliance, the largest metals service center company in North America, said the credit agreement has a term of five years.

The company had, in February, announced plans to acquire Fort Lauderdale, Florida-based rival Metals USA for $766 million. The acquisition adds 48 distribution centers for the company and is expected to close this year.

''These financing transactions are a significant step in obtaining the financing necessary to complete our previously announced acquisition of Metals USA that we expect to close in the 2013 second quarter. The bank markets remain favorable and we are happy with the pricing and other terms under the new facility. We appreciate the continued support of the syndicate of 26 banks involved in our credit facility,'' David H Hannah, chairman and CEO of Reliance, said.

Bank of America NA acted as administrative agent for the deal and JP Morgan Chase Bank, NA and Wells Fargo Bank, National Association were co-syndication agents.

Merrill Lynch, Pierce, Fenner & Smith Incorporated, JP Morgan Securities LLC and Wells Fargo Securities, LLC were joint lead arrangers and joint book managers.

Reliance Steel & Aluminum Co, headquartered in Los Angeles, California, is the largest metals service center company in North America. Through a network of more than 240 locations in 38 states and ten countries outside of the United States, the company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers across a broad range of industries.