Steel Dynamics to acquire OmniSource.(SCRAP INDUSTRY NEWS)

Steel Dynamics Inc. (SDI), Fort Wayne, Ind., and OmniSource Corp. have announced the execution of a definitive agreement whereby Steel Dynamics will acquire OmniSource, a privately held scrap recycling company based in Fort Wayne, Ind.

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Both companies' boards of directors have unanimously approved the agreement.

Under the terms of the deal, OmniSource will operate as a wholly owned subsidiary of Steel Dynamics and will focus on ferrous and nonferrous scrap processing, brokerage and industrial scrap management. SDI's existing scrap operations in Virginia and Tennessee will be consolidated into OmniSource, as will its planned scrap processing facility in Indianapolis.

During an Oct. 2 conference call discussing details of the acquisition, representatives from both companies noted that they had discussed a partnership as long ago as 1998.

Keith Busse, chairman and CEO for Steel Dynamics, noted the partnership provides a unique vertical integration that will allow SDI easy access to scrap.

Danny Rifkin, OmniSource's current president and CEO, will join the SDI management team as an executive vice president of SDI's newly formed recycled metals platform. He also will lead the OmniSource subsidiary as president and COO and be named to SDI's board of directors.

"This acquisition creates a significant new business platform for SDI and represents a quantum leap as it would regard strategic expansion into the steel scrap and recycled metals sector, which is an important element of our overall growth plan," Keith Busse, SDI's chairman and CEO, commented. "Aside from the fact that scrap is a critical resource for our steelmaking operations and Omni has historically been one of our largest suppliers, this acquisition opens the door for further profitable growth in a sector of increasing relevance on a global scale. OmniSource is one of the premier, if not the premier organization in both the ferrous and nonferrous scrap industries and has demonstrated its ability to successfully grow its business," Busse said.

"When considered in conjunction with SDI's recently announced mining and minerals projects in the state of Minnesota, Steel Dynamics will become the only domestic steelmaker to have a significant presence in both the virgin iron ore and ferrous recycling markets," Busse continued, "These initiatives are expected to play a significant role in SDI's future steelmaking growth."

OmniSource's Rifkin also commented on the deal. "This transaction presents a unique opportunity for all stakeholders and presents our employees with new growth opportunities," he said. "We have been associated with Steel Dynamics since its founding, and applaud the tremendous success that the company has achieved. I believe that the addition of OmniSource to the SDI family will prove to be very strategic over the long-term, and we look forward to continued growth and expansion in the scrap industry tied to the world-class service for which OmniSource has become known. I am personally excited to join the SDI management team and to play a significant role in the broader scope of an integrated metals company," Rifkin added.

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