Optimus Steel’s $92 Million Acquisition of Gerdau’s Wire Rod Operations in the U.S.


Simpson Thacher is representing Gerdau S.A. (NYSE: GGB) in connection with its definitive agreement to sell its Beaumont, Texas wire rod mill and two downstream facilities to Optimus Steel.

Gerdau SA has entered into a definitive agreement with Optimus Steel to sell its Beaumont wire rod mill and two downstream facilities in Texas for $92.5 million.

The Beaumont steel mill has melt capacity of around 700,000 tons per year and rolling capacity of 800,000 tpy, according to a recent industry director. The mill produces wire rod and coiled rebar.

The midpoint for American Metal Market’s assessment of US domestic wire rod was $32.50 per hundredweight on January 24, up from a midpoint of $31 per cwt fob mill on January 10.

The downstream facilities are Beaumont Wire Products and Carrollton Wire Products. The former includes a wire mesh mill, while the latter supplies industrial wire into the greater US southern region, according to a statement from Optimus Steel.

The Simpson Thacher team includes Michael T. Holick (Picture), Alan Klein, Erika Tang and Rob Meyer (M&A); Robert Holo, Jacqueline Clinton and Deborah Plum (Tax); Gregory Grogan, Alisa Tschorke and Jason Fixelle (Executive Compensation and Employee Benefits); Adeeb Fadil, Louise Kruger and Noreen Lavan (Environmental); Krista McManus (Real Estate); Peter Guryan, Richard Jamgochian, Kelly Karapetyan and William Pilon (Antitrust); Lori Lesser and Amber Harezlak (Intellectual Property); Timothy Coxon (Banking and Credit); and Steven DeLott (Insurance).

Optimus Steel is a newly formed company affiliated with Jacksonville, Florida-based Wire Mesh Corp (WMC), American Metal Market has learned. WMC and Optimus are “completely separate, independent entities with different management,” though they are also affiliates, according to an Optimus statement.

WMC will operate the downstream assets, and Optimus Steel will operate the Beaumont rod mill, the statement said. The Beaumont wire mesh mill will enable WMC to offer standard and structural mesh products. Those in turn will complement WMC’s pre-stressed concrete strand operation in Texas.

Involved fees earner: Michael Holick – Simpson Thacher & Bartlett; Alan Klein – Simpson Thacher & Bartlett; Erika Tang – Simpson Thacher & Bartlett; Robert Meyer – Simpson Thacher & Bartlett; Robert Holo – Simpson Thacher & Bartlett; Jacqueline Clinton – Simpson Thacher & Bartlett; Deborah Plum – Simpson Thacher & Bartlett; Gregory Grogan – Simpson Thacher & Bartlett; Alisa Tschorke – Simpson Thacher & Bartlett; Jason Fixelle – Simpson Thacher & Bartlett; Adeeb Fadil – Simpson Thacher & Bartlett; Louise Kruger – Simpson Thacher & Bartlett; Noreen Lavan – Simpson Thacher & Bartlett; Krista McManus – Simpson Thacher & Bartlett; Peter Guryan – Simpson Thacher & Bartlett; Richard Jamgochian – Simpson Thacher & Bartlett; Kelly Karapetyan – Simpson Thacher & Bartlett; William Pilon – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Amber Harezlak – Simpson Thacher & Bartlett; Timothy Coxon – Simpson Thacher & Bartlett; Steven DeLott – Simpson Thacher & Bartlett;

Law Firms: Simpson Thacher & Bartlett;

Clients: Gerdau S.A.;

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Author: Ambrogio Visconti