Metals USA Holdings (MUSA), one of the largest metal service center businesses in North America, is expected to price its IPO this week.
Business Overview (from prospectus)
We are one of the largest metal service center businesses in North America and believe we are a leading provider of value-added metal processing (“value-added” refers to enhanced metal processing and services beyond basic delivery that we believe are recognized and desired by many end-users as efficient cost savings opportunities) and inventory management services. Our national network of 34 service center facilities are strategically located in close proximity to our suppliers and customers in key geographic end-markets. This geographically diverse network allows us to work closely with our customers to facilitate efficient and cost effective inventory management. In addition to our warehouse and distribution capabilities, we offer a wide range of value-added metal processing services. These value added services, which include cutting, sawing, punching, shot blasting, surface grinding and drilling, are recognized and desired by many end users. Our ability to offer these and other value-added services allows us to earn a premium margin over the cost of metal.
Offering: 10.5 million shares at $18 - $20 per share. Net proceeds of approximately $171.6 million will be used to retire debt.
Net sales were approximately $1.1 billion for the year ended December 31, 2009 compared to approximately $2.2 billion for the year ended December 31, 2008...Cost of sales decreased 44.8% from $1.6 billion for the year ended December 31, 2008, to $890.1 million for the year ended December 31, 2009...Operating income (loss) decreased 110.7% from operating income of $206.4 million for the year ended December 31, 2008 to an operating loss of $22.1 million for the year ended December 31, 2009...Net income was approximately $3.5 million, compared to approximately $72.6 million for the year ended December 31, 2008...
We are engaged in a highly fragmented and competitive industry. The United States and Canadian metal service center industry generated approximately $153 billion in 2008 revenues from approximately 1,200 different companies. Based on 2008 revenues the top 100 competitors represent approximately 47% of industry revenue. Metals USA is ranked ninth among this group based on 2008 revenues. Markets are generally oriented on a regional and local basis. We have numerous competitors in each of our product lines and geographic locations. In every market we service we compete with various combinations of other large, value-added oriented metals processor/metal service centers some of which may have greater financial resources than we have, smaller metals processors/metal service centers and, to a much lesser extent, with primary metals producers, who typically sell to very large customers requiring regular shipments of large volumes of metals.