Global metals & mining reviewig.cdn.responsys.net/.../__RS_CP__/KBCM_MetalsMonthly.pdf ·...
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Aluminum
Anheuser-Busch plans to invest $175 million to construct a new aluminum bottle line at its facility in Jackson, Florida. The new
line will increase the facility’s aluminum bottle production by 50% and will require a 140,000-square-foot expansion. The line is
expected to be operational by Q1 2017
Thai Summit Kentucky Corp, a fabricator of automotive parts, announced plans to invest $110 million to build a new 220,000-
square-foot stamping and assembly facility in Bardstown, Kentucky. The facility will produce stamped and welded aluminum
assemblies for Ford’s truck plant in Louisville. The facility will employ 216 people and is expected to be completed by the end of
2016
Steel
Nuco Steel Bar Technologies announced plans to invest $37 million to construct a 150,000-square-foot, state-of-the-art
production facility at the Airport Industrial Park in Valparaiso, Indiana. The facility will process carbon, alloys and tool steels into
flat, round and square steel bars. The project is expected to be completed by the first half of 2017 and will reach 50,000 tons of
annual capacity by 2020
Reliance Steel announced that it has acquired Best Manufacturing Inc., a custom sheet metal fabricator based in Jonesboro,
Arkansas, for an undisclosed consideration. Best Manufacturing provides precision fabrication services including laser cutting,
shearing, CNC punching and CNC forming and rolling, among other services
Steel Technologies announced plans to invest $6 million to expand its Woodstock, Ontario facility to meet the increased demand
of lightweight materials including aluminum and advanced high-strength steel which are used in automotive applications. The
scope of the investment includes the installation of new equipment and adding 64,000-square-feet to its existing 80,000-square-
foot facility. The project is expected to be completed by the end of 2018
Specialty & Alloys
Alcoa recently announced a new contract with Airbus to supply 3-D printed titanium components and engine pylon parts. Alcoa
will manufacture the components at three of its recently expanded additive manufacturing facilities – Whitehall, Michigan; Austin,
Texas; and Pittsburgh, Pennsylvania
Copper, Lead and Zinc
Bearing Bronze, an Ontario-based service center, announced plans to increase its reach into the growing and lucrative
aerospace industry in the coming years. The Company believes that more than 50% of its revenue will be generated from
landing gear components within five years. The aerospace market could boost the Company’s total sales by more than 20
percent to between $15 - $16 million per year. The growth will likely increase the Company’s copper rod purchasing
Mining, Scrap and Materials
U.S. nonferrous scrap markets are forging ahead after one of the most challenging quarters since 2008. According to delegates
at the Institute of Scrap Recycling Industries, sentiment is mixed among suppliers and consumers. Inbound scrap flows into
dealers’ yards dropped significantly at the start of 2016, and suppliers estimated that nonferrous flows have fallen approximately
50 percent during the first quarter compared to 2015 levels
1
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was not issued by our research department. The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be
complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation
of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation
and particular needs of any individual person or entity.
Global metals & mining review
(7.4%)
13.9%
(24.3%)
(2.4%)
(50.0%)
(40.0%)
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
Global Producers Service Centers Specialty Metals S&P 500
147 bps
235 bps
447 bps
659 bps
0
100
200
300
400
500
600
700
800
900
1,000
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
Sp
rea
d t
o M
atu
rity
A Index BBB Index BB Index B Index
2
Index Performance (through April 11, 2016)
Investment Grade and High Yield Bond Spreads (through April 10, 2016)
Service Centers stocks
have outpaced the recovery
in the metals sector; the
index is up 13.9% over the
past 12 months vs. (7.4%)
for Global Products and
(24.3%) for Specialty Metals
Source: Capital IQ
Bond spreads were
relatively stable in March
compared to the volatile
start of 2016
Capital markets update
3
Construction Put In Place – Annualized and Seasonally Adjusted (through February 2016)
Purchasing Managers Index (PMI) (March 2016)
According to the U.S.
Census Bureau, February
2016 construction spending
totaled $1,144.0 billion, up
10.3% YoY
Gains are attributable to a
10.1% increase in Non-
Residential Construction and
an increase of 10.5% in
Residential Construction
The manufacturing PMI
came in at 51.8 in March, an
increase from the February
level of 49.5
The PMI was above 50.0 for
the 1st time in 6 months,
indicating expansion in the
manufacturing sector
Source: Bloomberg, U.S. Census Bureau, Institute for Supply Management
Economic commentary
690.3
453.7
$30
$130
$230
$330
$430
$530
$630
$730
$830
Feb-09 Nov-09 Aug-10 Jun-11 Mar-12 Dec-12 Oct-13 Jul-14 Apr-15 Feb-16
Billio
ns
of
Do
lla
rs
Residential Non-residential
51.8
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16
ISM
Pu
rch
as
ing
Ma
na
ge
rs I
nd
ex
(P
MI)
4
Capacity Utilization (through April 2, 2016)
Oil & Gas Drilling Activity – U.S. [1] (April 1, 2016)
U.S. steel production was
down slightly in March, with
capacity utilization at 70.6%,
down from 72.4% in
February
Mills have produced 23.2
million tons in 2016 at an
average capacity utilization
rate of 70.4%
Source: American Iron and Steel Institute, Baker Hughes Investor Relations/Rig Data
[1] Horizontal drilling data includes directional drilling wells
Economic commentary (continued)
0.0%
15.0%
30.0%
45.0%
60.0%
75.0%
90.0%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Mar-15 Apr-15 Jun-15 Aug-15 Sep-15 Nov-15 Dec-15 Feb-16 Apr-16
Ca
pa
city
Utiliz
atio
n (%
)
To
ns
(0
00
s)
Total Production Capacity Utilization
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2006 2008 2010 2012 2014 2016
% o
f T
ota
l R
ig C
ou
nt
% Horizontal % Vertical
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Oil v
s. G
as
(R
ig C
ou
nt)
Oil Gas
Short Term Rates Friday Prior Week Change
1-Month LIBOR 0.43% 0.44% (0.01% )
3-Month LIBOR 0.63% 0.63% 0.00%
Fed Funds 0.50% 0.50% 0.00%
Fed Discount 0.75% 0.75% 0.00%
Prime 3.50% 3.50% 0.00%
US Treasury Yields
2-year Treasury 0.70% 0.72% (0.02% )
5-year Treasury 1.15% 1.22% (0.07% )
10-year Treasury 1.72% 1.77% (0.05% )
Swaps vs. 3M LIBOR
2-year 0.90% 0.92% (0.02% )
5-year 1.20% 1.25% (0.05% )
10-year 1.65% 1.70% (0.05% )
Speculations Build Large Positions in the Yen Current Rate Snapshot (as of April 11, 2016)
5
Source: Bloomberg, Federal Reserve
Fed Speak & Economic News
US Treasury yields declined as global risk tolerance fell, with European stocks selling off and bank credit spreads
widening as political discourse in Europe weighed on sentiment. Heading farther east, the Japanese yen strengthened in
March, also highlighting the risk-off sentiment; investors doubt whether Japan’s central bank will intervene anytime
soon, especially after Japanese leaders promised not to engage in currency wars at recent summits. The 10-year
Treasury yield traded within a 7-basis-point range, starting at the high of 1.76%, touching a low of 1.69% before
rebounding to 1.72%.
In early April, the Fed released its March FOMC meeting minutes, which confirmed market participants’ concerns about
global economic headwinds. From the minutes: “Many participants expressed a view that the global economic and
financial situation still posed appreciable downside risks to the domestic economic outlook.” FOMC participants also
have concerns about the Fed’s ability to navigate a potential slowdown since short-term rates remain close to the zero-
bound; in other words, they prefer to use conventional methods to counteract a slowing in the economy (e.g., lower the
federal funds target range) and don’t want to raise rates too soon if they don’t have to. From the minutes: “the FOMC
continued to have little room to ease monetary policy through conventional means if economic activity or inflation turned
out to be materially weaker than anticipated, but could raise rates quickly if the economy appeared to be overheating or
if inflation was to increase significantly more rapidly than anticipated.” The minutes also provided some color as to why
the “dot plot” was revised lower: To achieve their economic objectives in the current market environment, a shallower
interest rate path than projected at the December meeting seemed more appropriate. The federal funds market implies a
zero-percent chance of a Fed hike at the April 26-27 meeting and a ~18% likelihood at the June 14-15 meeting.
The risk flares were bright in Europe as potential for a UK exit became more plausible, despite the vote being more than
two months away. Recent polls suggest that the “leave” votes have been catching up with the “remain” votes. The jitters
surrounding the upcoming referendum led to a decent widening in European government bond spreads, particularly
Italian and Spanish credit. The material weakening of credit worthiness across the pond will likely serve as a lid to US
Treasury yields for the next couple months.
Japanese portfolio managers continued their selling of the yen vis-à-vis the
dollar through the end of March. They are trading in their stock and yen to buy
massive amounts of foreign bonds. However, the yen has surged recently due
to speculators in the futures market having amassed a near-record long yen
position (the largest in over 20 years). Interestingly, Prime Minister Shinzo Abe
downplayed the possibility of intervention. It is likely nothing will happen without
Japanese officials consulting their G7 partners first. For the time being it looks
as if the yen will weigh on the economy unfavorably via corporate earnings and
import prices.
Source: Bloomberg
Capital Markets Update
6
Steel Prices (through April 4, 2016)
LME Base Metals Prices (through April 4, 2016)
Source: American Metal Market
Note: Midwest quotes used for steel pricing
Industry fundamentals
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
. $
/ t
on
HRC CRC HDG Plate
$0
$200
$400
$600
$800
$1,000
$1,200
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
. $
/ t
on
Rebar Merchant Bar
Steel HRC CRC HDG Plate Rebar Merchant Bar
End of Month Price ($ / Ton) $415 $584 $654 $489 $470 $582
MoM % Change 3.8% 7.0% 6.2% 4.0% (1.3%) 0.0%
YoY % Change (6.6%) 3.2% (0.3%) (19.4%) (21.7%) (20.5%)
LME Base Metals Aluminum Copper Nickel Zinc
End of Month Price ($ / lb) $0.69 $2.25 $3.94 $0.82
MoM % Change (1.6%) 7.3% 4.0% 4.7%
YoY % Change (16.5%) (17.9%) (32.5%) (18.2%)
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
.$ / l
b
Aluminum Copper Zinc
$0.00
$5.00
$10.00
$15.00
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
. $
/ l
b
Nickel
0.0
50.0
100.0
150.0
200.0
250.0
300.0
0
2,000
4,000
6,000
8,000
10,000
12,000
Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16
Av
g. D
aily
Sh
ipm
en
ts ('0
00
s T
on
s)
En
din
g In
ve
nto
ry (
'00
0s
To
ns
)
Ending Inventory Avg. Daily Shipments
7
Monthly Steel Production (through February 29, 2016)
MSCI Ending Inventories & Average Daily Shipments (through February 28, 2016)
Source: World Steel Association
Source: Metals Service Center Institute
('000s M T) U.S. China Rest of World World Total
LTM Production 78,294 791,073 707,944 1,577,311
MoM % Change (1.4%) (6.5%) (4.0%) (5.1%)
YoY % Change 2.9% (5.5%) (3.3%) (4.1%)
% of World Total 5.0% 50.2% 44.9% 100.0%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16
Mo
nth
ly P
rod
uc
tio
n (
'00
0s
To
ns
)
U.S. China Rest of World
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16
U.S
. $
in
millio
ns
Exports Imports Net Exports
8
Monthly Scrap Imports / Exports (through February 29, 2015)
Ferrous & Nonferrous Scrap Prices (through April 4, 2016)
Source: U.S. Census Bureau, American Metal Market
$0
$100
$200
$300
$400
$500
$600
$700
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
. $
/ t
on
Heavy Melt #1 Shredded Auto
$0
$100
$200
$300
$400
$500
$600
$700
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
U.S
. $
/ t
on
Heavy Melt #1 Shredded Auto
Ferrous ($ / ton) Nonferrous ($ / lb)
Scrap Heavy Melt #1 Shredded Auto Aluminum Scrap Copper Scrap Nickel Scrap
End of Month Price $180 $207 $0.60 $1.77 $2.45
MoM % Change 20.3% 9.2% (2.8%) 5.7% 0.0%
YoY % Change (19.8%) (11.7%) (15.7%) (20.6%) (42.4%)
Scrap Spread $235 $208 $0.09 $0.48 $1.49
9
[1] KeyBanc Capital Markets’ Industrial Research platform has consistently achieved a Top 3 ranking in Greenwich Associates annual survey of small / mid-cap fund
managers
KeyBanc Capital Markets’ top-ranked[1] equity research team covers numerous companies across the Metals and Mining
sector. Selected recent research notes are provided below. Click on the respective “tear out” to read the entire note.
June 23, 2015
STLD: Improving EPS/FCF
Predictability Merit Further Update
March 16, 2016
LXFR: Slight Miss on Core Op Results, FCF
Solid; 2016 Outlook Modestly Above Our View
March 30, 2016
WOR: Updating Estimates; Thoughts Ahead of
Analyst Day
March 30, 2016
TMST: 2016 Shaping Up Better on Cost
Performance, Mix; Providing Detailed Volume
Bridge
March 27, 2016
CMC: Solid Execution Stemming Macro Volatility;
Maintaining EBITDA Estimates
March 15, 2016
NUE: 1Q Guidance in Line; 2016 Outlook
Supportive of Street’s View
March 9, 2016
RYI: 4Q Subdued as Expected; Looks like 1Q
Rebounding Better than Expectations
March 28, 2016
SCHN: 2Q (Feb.) Guide Weak, Incremental Cost
Reduction Assists Outlook
March 22, 2016
Carbon Steel: Spring Fever as HRC/Scrap Run
Continues; Taking a Look at Px Sensitivities
Select KeyBanc Capital Markets’ equity research
Carbon Steel
10
Announced Closed Acquirer
(Parent)
Target
(Seller) Highlights
4/4/2016 4/4/2016 Reliance Steel &
Aluminum Best Manufacturing
Reliance Steel & Aluminum acquired Best Manufacturing for an
undisclosed consideration
The transaction will compliment Reliance’s existing service center
network and value-added processing capabilities
3/28/2016 3/31/2016
Banker Steel
(Bridge Fabrication
Holdings)
NYC Constructors
Banker Steel Company acquired NYC Constructors for $9 million
The transaction will expand Banker Steel’s capabilities in the New
York City commercial construction market
3/24/2016 Pending Tianwu Tongyong
(Tianjin)
International Trade
Maoming Hengda Steel
Group
(General Steel Holdings)
Tianwu Tongyong (Tianjin) International Trade agreed to acquire
Maoming Hengda Steel Group from General Steel Holdings for $51
million
The acquisition will expand Tianwu Tongyong (Tianjin) International
Trade’s scope of activities in the steel industry
3/24/2016 Pending Black Diamond
Capital Management
LaPlace and Vinton
facilities of ArcelorMittal
Black Diamond Capital Management agreed to acquire LaPlace and
Vinton facilities of ArcelorMittal for an undisclosed consideration
The acquisition will enhance Black Diamond Capital Management’s
investment portfolio in the steel industry
3/22/2016 Pending UACJ
UACJ Automotive Whitehall
Industries
(SRS International
Holdings)
UACJ agreed to acquire UACJ Automotive Whitehall Industries from
SRS International Holdings for $155 million
The transaction will expand UACJ’s geographic presence in the
United States
3/16/216 3/16/216 LMS Reinforcing
Steel Group
Johasee Rebar
(Mike Hill, Michael Hill and
Tami Chapman )
LMS Reinforcing Steel Group acquired Johasee Rebar from Mike
Hill, Michael Hill and Tami Chapman for an undisclosed
consideration
The transaction will expand LMS Reinforcing Steel Group’s product
and service offerings for residential and commercial customers
3/7/2016 3/24/2016 Silver Standard
Resources
Claude Resources
(Crown Capital Partners)
Silver Standard Resources acquired Claude Resources from Crown
Capital Partners for $231 million
The acquisition will enhance Silver Standard Resources’s
geographic presence in Canada
Source: American Metal Market, The Daily Deal, MergerMarket
Note: Deals lacking available “announced date” data contain identical “announced” and “closed” dates
Select recent transaction activity
11
Source: American Metal Market, The Daily Deal, MergerMarket
Note: Deals lacking available “announced date” data contain identical “announced” and “closed” dates
Closed
(Announced) Company Gross Offering Size Highlights
3/22/2016
(3/22/2016) Aleris International
$550 million 9.500% Senior
Notes
The $550 million 9.500% Senior Notes is due on April 1, 2021
The proceeds will be used for general corporate purposes
KeyBanc acted as Co-Manager
3/17/2016
(3/17/2016)
Namasco $275 million Revolving Credit
Facility
The $275 million Revolving Credit Facility is due on March 17, 2021
The proceeds will be used for general corporate purposes
3/31/2016
(3/17/2016)
Warrior Coal $75 million Revolving Credit
Facility
The $75 million Revolving Credit Facility is due on March 31, 2019
The proceeds will be used for debt repayment
3/18/2016
(3/16/2016)
Silver Wheaton $2 billion Revolving Credit Facility The $2 billion Revolving Credit Facility is due on February 27, 2021
The proceeds will be used for general corporate purposes
3/29/2016
(3/16/2016)
HudBay Minerals
$350 million Revolving Credit
Facility
The $350 million Revolving Credit Facility is due on March 13, 2019
The proceeds will be used for general corporate purposes
3/10/2016
(3/10/2016) Freeport-McMoRan
$3.5 billion Revolving Credit
Facility
The $3.5 billion Revolving Credit Facility is due on May 30, 2019
The proceeds will be used for general corporate purposes
3/7/2016
(3/7/2016) Atlantic Gold
$9.8 million 8.500% Convertible
Debenture
The $9.8 million 8.500% Convertible Debenture is due on March 7,
2021
The proceeds will be used for general corporate purposes
3/1/2016
(3/1/2016) Tredegar
$400 million Revolving Credit
Facility
The $400 million Revolving Credit Facility is due on March 1, 2021
The proceeds will be used for general corporate purposes
Recent capital market activity
12
Source: CapitalIQ, ThomsonReuters, SEC Filings
Note: Outlying EV/EBITDA and P/E multiples were excluded from average and median calculations
Metals public operating & trading statistics
$ in millions, except per share data Prices
as of Market Enterprise LTM CY 2016 LTM CY 2016
Company Ticker 3/31/2016 Cap Value Sales EBITDA % Margin EPS EBITDA EPS EV / EBITDA P/E Ratio EV / EBITDA P/E Ratio
ArcelorMittal ENXTAM:MT $4.53 $8,182 $26,164 $63,578 $3,832 6.0% ($2.53) $4,543 ($0.24) 6.8x NM 5.8x NM
Companhia Siderúrgica Nacional BOVESPA:CSNA3 2.01 2,795 12,925 4,360 1,071 24.6% (0.13) 750 (0.35) 12.1x NM 17.2x NM
Gerdau S.A. BOVESPA:GGBR4 1.84 3,126 8,712 12,279 1,243 10.1% 0.07 1,295 0.08 7.0x 24.9x 6.7x 24.1x
Grupo Simec S.A.B. de C.V. AMEX:SIM 8.15 1,352 965 1,522 129 8.5% 0.20 188 0.52 7.5x NM 5.1x 15.8x
PAO Severstal LSE:SVST 10.58 8,576 9,385 6,396 2,070 32.4% 0.89 1,561 1.23 4.5x 11.9x 6.0x 8.6x
SSAB AB OM:SSAB A 3.61 1,836 4,853 7,018 451 6.4% (0.11) 453 (0.12) 10.8x NM 10.7x NM
Tata Steel Limited BSE:500470 4.82 4,682 14,081 18,969 1,392 7.3% 0.04 1,757 0.07 10.1x NM 8.0x NM
ThyssenKrupp AG XTRA:TKA 20.80 11,769 16,440 48,154 3,305 6.9% 1.31 3,222 1.32 5.0x 15.9x 5.1x 15.8x
Average $5,290 $11,691 $20,284 $1,687 12.8% $1,721 8.0x 17.5x 8.1x 16.1x
Median $3,904 $11,155 $9,649 $1,318 7.9% $1,428 7.2x 15.9x 6.4x 15.8x
AK Steel Holding Corporation AKS $4.13 $739 $3,419 $6,693 $352 5.3% ($2.77) $372 ($0.16) 9.7x NM 9.2x NM
Commercial Metals Company CMC 16.97 1,993 2,705 5,092 449 8.8% 1.38 387 1.08 6.0x 12.3x 7.0x 15.7x
Nucor Corporation NUE 47.30 15,099 17,841 16,439 1,822 11.1% 1.61 1,889 1.86 9.8x NM 9.4x NM
Steel Dynamics Inc. STLD 22.51 5,530 7,390 7,594 650 8.6% 1.15 971 1.34 11.4x 19.6x 7.6x 16.8x
United States Steel Corp. X 16.05 2,384 4,791 11,574 202 1.7% (7.26) 221 (2.41) 23.7x NM 21.7x NM
Average $5,149 $7,229 $9,479 $695 7.1% $768 12.1x 15.9x 11.0x 16.2x
Median $2,384 $4,791 $7,594 $449 8.6% $867 12.7x 15.9x 9.2x 16.2x
A. M. Castle & Co. CAS $2.70 $65 $375 $771 ($36) (4.7%) ($5.07) ($36) ($5.07) NM NM NM NM
Olympic Steel Inc. ZEUS 17.31 195 341 1,176 17 1.4% (0.16) 17 (0.16) 20.2x NM 20.2x NM
Reliance Steel & Aluminum Co. RS 69.19 4,990 6,843 9,351 810 8.7% 4.55 810 4.55 8.5x 15.2x 8.5x 15.2x
Russel Metals Inc. TSX:RUS 15.25 949 1,139 2,399 102 4.2% 0.39 110 0.77 11.2x NM 10.3x 19.8x
Ryerson Holding Corporation RYI 5.56 178 1,148 3,167 161 5.1% 0.24 156 0.51 7.2x 23.5x 7.3x 10.9x
Worthington Industries, Inc. WOR 35.64 2,351 3,044 3,109 313 10.1% 2.19 315 2.45 9.7x 16.3x 9.7x 14.5x
Average $1,455 $2,149 $3,329 $228 4.1% $229 11.3x 18.3x 11.2x 15.1x
Median $572 $1,144 $2,754 $131 4.7% $133 9.7x 16.3x 9.7x 14.9x
ALBA SE DB:ABA $58.99 $580 $611 $1,835 $57 3.1% ($0.41) NA NA 10.8x NM NA NA
Schnitzer Steel Industries, Inc. SCHN 18.44 514 702 1,683 65 3.9% (0.46) 80 0.30 10.8x NM 8.8x NM
Sims Metal Management Limited ASX:SGM 6.64 1,354 1,058 4,163 80 1.9% (0.40) 158 0.21 13.3x NM 6.7x NM
Average $816 $790 $2,560 $67 3.0% $119 11.6x NM 7.8x NM
Median $580 $702 $1,835 $65 3.1% $119 10.8x NM 7.8x NM
Allegheny Technologies Inc. ATI $16.30 $1,802 $3,262 $3,720 $11 0.3% ($1.95) $259 ($0.57) NM NM 12.6x NM
Carpenter Technology Corp. CRS 34.23 1,606 2,233 2,028 243 12.0% 1.25 274 1.52 9.2x NM 8.2x 22.6x
Haynes International, Inc. HAYN 36.50 456 412 472 59 12.5% 1.97 41 1.17 7.0x 18.5x 10.2x NM
Kaiser Aluminum Corporation KALU 84.54 1,563 1,658 1,392 181 13.0% 4.99 181 4.99 9.2x 16.9x 9.2x 16.9x
Materion Corporation MTRN 26.48 537 526 1,025 78 7.6% 1.42 78 1.42 6.7x 18.6x 6.7x 18.6x
Universal Stainless & Alloy Products Inc. USAP 10.19 76 153 181 9 5.0% (0.03) 9 (0.03) 16.9x NM 16.9x NM
Average $1,007 $1,374 $1,470 $97 8.4% $140 9.8x 18.0x 10.6x 19.4x
Median $1,050 $1,092 $1,209 $69 9.8% $130 9.2x 18.5x 9.7x 18.6x
Inte
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$ in millions
Total Net Total Debt / Net Debt / Total Debt / Net Debt / EBITDA /
Company Ticker Debt Debt EBITDA EBITDA Cap (book) Cap (book) Interest
ArcelorMittal ENXTAM:MT $19,786 $15,684 NM 4.1x 43.9% 34.8% 2.8x
Companhia Siderúrgica Nacional BOVESPA:CSNA3 12,437 10,119 NM NM 92.4% 75.2% 1.0x
Gerdau S.A. BOVESPA:GGBR4 7,455 5,506 NM 4.4x 45.5% 33.6% 2.5x
Grupo Simec S.A.B. de C.V. AMEX:SIM 0 (421) NM NM 0.0% NM NM
PAO Severstal LSE:SVST 2,452 794 1.2x 0.4x 52.1% 16.9% 16.8x
SSAB AB OM:SSAB A 3,346 3,011 NM NM 37.9% 34.1% 3.7x
Tata Steel Limited BSE:500470 10,833 9,146 NM NM 67.2% 56.7% 2.0x
ThyssenKrupp AG XTRA:TKA 9,154 4,605 2.8x 1.4x 70.9% 35.7% 4.4x
Average $8,183 $6,056 2.0x 2.6x 51.3% 41.0% 4.8x
Median $8,305 $5,055 2.0x 2.7x 48.8% 34.8% 2.8x
AK Steel Holding Corporation AKS $2,354 $2,298 NM NM NM NM 2.0x
Commercial Metals Company CMC 1,094 712 2.4x 1.6x 44.8% 29.1% 6.0x
Nucor Corporation NUE 4,412 2,372 2.4x 1.3x 37.3% 20.1% 10.5x
Steel Dynamics Inc. STLD 2,595 1,868 4.0x 2.9x 49.2% 35.4% 4.2x
United States Steel Corp. X 3,161 2,406 NM NM 56.5% 43.0% 0.9x
Average $2,723 $1,931 2.9x 1.9x 46.9% 31.9% 4.7x
Median $2,595 $2,298 2.4x 1.6x 47.0% 32.3% 4.2x
A. M. Castle & Co. CAS $322 $311 NM NM 87.3% 84.2% NM
Olympic Steel Inc. ZEUS 148 147 NM NM 36.8% 36.4% 3.0x
Reliance Steel & Aluminum Co. RS 1,929 1,824 2.4x 2.3x 33.0% 31.2% 9.6x
Russel Metals Inc. TSX:RUS 301 190 3.0x 1.9x 31.0% 19.6% 3.2x
Ryerson Holding Corporation RYI 1,035 969 6.4x 6.0x NM NM 1.7x
Worthington Industries, Inc. WOR 629 602 2.0x 1.9x 46.9% 44.8% 9.7x
Average $727 $674 3.4x 3.0x 47.0% 43.3% 5.4x
Median $476 $456 2.7x 2.1x 36.8% 36.4% 3.2x
ALBA SE DB:ABA $34 $23 0.6x 0.4x 17.2% 11.9% 3.5x
Schnitzer Steel Industries, Inc. SCHN 204 185 3.1x 2.8x 28.1% 25.5% 7.5x
Sims Metal Management Limited ASX:SGM 6 (296) 0.1x NM 0.4% NM 6.2x
Average $81 ($29) 1.3x 1.6x 15.2% 18.7% 5.7x
Median $34 $23 0.6x 1.6x 17.2% 18.7% 6.2x
Allegheny Technologies Inc. ATI $1,496 $1,346 NM NM 41.8% 37.6% 0.1x
Carpenter Technology Corp. CRS 648 627 2.7x 2.6x 34.5% 33.4% 8.8x
Haynes International, Inc. HAYN 5 (44) 0.1x NM 1.3% NM NM
Kaiser Aluminum Corporation KALU 198 95 1.1x 0.5x 20.4% 9.8% 7.5x
Materion Corporation MTRN 14 (11) 0.2x NM 2.7% NM NM
Universal Stainless & Alloy Products Inc. USAP 77 77 NM NM 29.4% 29.4% 3.1x
Average $406 $348 1.0x 1.6x 21.7% 27.6% 4.9x
Median $138 $86 0.6x 1.6x 24.9% 31.4% 5.3x
Sele
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13
Source: CapitalIQ, ThomsonReuters, SEC Filings
Metals public credit statistics
14
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its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our
research department. The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied
upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This
report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or
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Metals & Mining Team
Select transaction experience
Eric Klenz
216.689.3974
Mike McMahon
216.689.4658
Arindam Basu
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216.689.5139
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216.689.5165
Petri Koivula
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Jeff Singleton
216.689.3494
Client Business Description
Deal Value
($ mm) Type Closed
Aleris International Manufacturer of aluminum rolled products $550 Senior Secured Notes Mar-16
Gibraltar IndustriesManufacturer of commercial building products and
processed metal products$300
Senior Secured Revolving
Credit FacilityDec-15
NN Inc.NN Inc. announced the acquisition of Precision
Engineered Components for $615 million$615 Buy-side Advisor Oct-15
NN Inc.Acquisition financing for purchase of Precision
Engineered Components for $615 million$925
Senior Secured / Unsecured
FinancingOct-15
NN Inc.Manufactures metal bearing components, plastic and
rubber components, and precision metal components$182 Follow-On Jul-15
Ellwood Group, Inc.Global manufacturer of high-quality, engineered, heavy
metal components$150 Senior Secured Financing Mar-15
Aleris International Global recycling and specification alloys business $525 Sell-Side Advisor Feb-15
Metaldyne Performance GroupProvides highly-engineered components for use in
engine, transmission and steering applications$150 IPO Dec-14
Metaldyne Performance GroupProvides highly-engineered components for use in
engine, transmission and steering applications$1,600 Senior Secured Financing Oct-14
Fairmount Santrol Produces industrial sand in North America $460 IPO Oct-14
NN Inc.Manufactures metal bearing components, plastic and
rubber components, and precision metal components$450 Senior Secured Financing Aug-14
NN Inc.Manufactures metal bearing components, plastic and
rubber components, and precision metal components$300 Buy-Side Advisor Aug-14
Ryerson Inc. Processor and distributor of metals $139 IPO Aug-14
Cadre Services, Inc.Supplier of premium frac sand products to the oil & gas
industry$98 Sell-Side Advisor Jul-14
Olympic Steel Inc. Value-added processor of flat-rolled steel products $365 ABL Financing Jun-14
Stripco LLCPremium producer of high quality, value-added cold
rolled strip and other processing servicesND Sell-Side Advisor May-14
Cliffs Natural ResourcesProduces iron ore pellets and supplies metallurgical
coal to steel producers$175 Equipment Financing Dec-13
Global Brass and Copper HoldingsFabricator and processor of specialized copper and
brass products$83 Follow-On Sep-13
Wildcat MineralsMaterial handling solutions provider for proppant
producers and oilfield service companiesND Sell-Side Advisor Sep-13
Fairmount Minerals Produces industrial sand in North America $1,285 Syndicated Finance Sep-13
Global Brass and Copper HoldingsFabricator and processor of specialized copper and
brass products$89 IPO Apr-13