Private equity behemoth Carlyle is to sell its majority stake in JMC Steel to the Zekelman family, which currently owns a minority stake.
JMC will put in place a new capital structure and debt facilities, while Carlyle will retain a minority stake in the company and participation on the board of directors.
Financial details were not disclosed, but the transaction, which is subject to financing, is expected to close by March 31.
“Our new ownership and accompanying changes in financial structure will give JMC much more flexibility to make strategic investments,” said JMC Group executive chairman Barry Zekelman.
“I believe strongly in the future of this company, the current management team, and the bright prospects for JMC Steel, which has been my passionate professional focus for 30 years.”
To retire the company’s existing debt and facilitate the transaction, JMC will borrow approximately $1.1bn.
The company is the largest independent pipe and manufacturer in North America and operates eleven plants in the US and Canada, with a total production capacity of approximately 2.6 million tons of steel per annum.
Carlyle bought JMC – originally John Maneely Company – for $550m in 2006, then merged it with Atlas Tube and Sharon Tube.
The firm was set to sell the enlarged JMC to Russia’s Novolipetsk Steel in a $3.5bn deal in 2008, but the Russian company pulled out in November of that year with the onset of the financial crisis.
Carlyle has $97.7bn of assets under management in 76 funds across three asset classes – private equity, real estate and credit alternatives.
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