industrial investment banking round-up
TRANSCRIPT
Industrial Investment Banking Round-UpBuilding ProductsAs of June 18th, 2021
5.0x
10.0x
15.0x
Feb-21 May-16 Aug-09 Nov-02 Jan-26 Apr-21(60%)
(45%)
(30%)
(15%)
0%
15%
30%
45%
60%
75%
90%
Feb-21 May-16 Aug-09 Nov-02 Jan-26 Apr-21
26%
Building Products Market Perspective
• Despite an ongoing recovery in the U.S. labor market, new unemployment claims rose to 412,000 this week, slightly higher thaneconomists’ estimates of 360,000 and last week’s total of 375,000
– This is the first increase in new unemployment claims since late April and marks the highest number since May 15
– States are increasingly moving to end pandemic-related benefits programs as some policy makers feel that the benefits are discouraging people from seeking work or returning to work
• Lumber prices began declining to more moderate levels as lumber futures for July delivery are down over 40% from records reached last month and have declined in 14 of the past 16 trading days
‒ Despite the steep decline in recent days, lumber prices are still nearly three times higher than what is typical for this time of year
‒ Lumber producers are expecting prices to remain elevated as homebuilders attempt to erase the country’s housing deficit of about 3.8 million homes
‒ Many wood products companies have announced significant investments to expand capacity at sawmills to meet future demand, butare facing long backlogs for key production equipment
• Nonresidential construction spending dipped slightly in April to $786.2 billion for the month, down 0.5% from the prior month
‒ This decline does not come as a surprise to nonresidential builders, as there has historically been a lag between broader economic recovery and recovery in the nonresidential construction industry
‒ Despite the slight decline in spending, many contractors are reporting rising backlogs and growing market confidence in the near term as many projects postponed during the early stages of the pandemic are set to return
• Senate Republicans unveiled a new infrastructure proposal calling for $928 billion to be invested in roads, bridges, transit systems and rail projects
Sources: CNBC, Freddie Mac, Realtor.com, Wall Street Research
Note: Market data as of 05/13/2021; Manufacturing (Large Cap): ALLE, AOS, ASX:JHX, CSL, FBHS, HUBB, IR, LII, MAS, MHK, NYSE:CNR, OC, SHW, SWK; Manufacturing (Mid Cap): AAON, AMWD, AWI, AYI, BCC, CREE, CVCO, DOOR, FRTA, GFF, JELD, LPX, NYSE:LCII, PATK, ROCK, SSD, TILE, TREX, TSX:OSB, WMS; Manufacturing (Small Cap): AFI, APOG, CSTE, DXYN, IIIN, LYTS, NX, NYSE:SKY, PGTI, TGLS; Distribution / Installation: BECN, BLD, BLDR, BXC, GMS, HDS, IBP, POOL, SIC, SITE, TSX:HDI, UFPI, WSO
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
For additional information on KeyBanc Capital Markets, please contact any of the individuals listed below:Building Products Team
Public Company Stock Performance Since February 21 Public Company Trading Performance Since February 21
41%29%
25%
14.2x
9.1x
Manufacturing (Large Cap) Manufacturing (Mid Cap) Manufacturing (Small Cap) Distribution / Installation S&P 500
12.6x
63%
Pat Curry
Managing Director
Head of Building Products
212.476.7428
Ali Zahrieh
Associate
Building Products
212.476.7467
Brian Clements
Analyst
Building Products
212.476.7483
Cole Morrison
Analyst
Building Products
212.476.7477
(Enterprise Value / Next-Twelve-Months EBITDA)(Indexed to 0%)
10.9x
June-17 June-17
Industrial Investment Banking Round-UpChemicals & MaterialsAs of June 17th, 2021
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
Jun-20 Jun-21Specialties Commodities / Diversified
35.2%34.9%
55.2%
Chemicals & Materials Market Perspectives• The Specialties Chemicals index experienced growth of 0.4% during the last month, while the Commodities / Diversified was
down 2.6%• Debt Capital Markets demand continues to remain robust, with pricing tight and terms accommodative• M&A activity remains strong, with corporates and sponsors actively hunting and divesting. Notable deals in the past month
include:
– Clariant, Heubach, and SK Capital Partners will acquire Pigments business of Clariant
– One Rock Capital Partners will acquire Tire Additives business of Eastman Chemical
– SK Capital Partners acquired Peinture Can-Lak/Valentus Specialty Chemicals
– Evonik Industries will acquire Infinitec Activos
– Vertellus Holdings will acquire IM Chemicals
– EQT Partners acquired DESOTEC
– Nexeo Plastics acquired Nevicolor
– Arkema will acquire Agiplast Italia
– Oak Hill Capital Partners will acquire Technimark
– Filtration Group Corporation acquired Molecular Products Group
– Synthos will acquire Synthetic Rubber business in Schkopau, Germany of Trinseo
– Kaprain Group acquired Spolchemie
– AlphaCo Group acquired Carbon Clean Tech
7.6x
Sources: Capital IQ as of 6/16/2021Commodities / Diversified: ASIX, ENXTPA:AKE, ASH, XTRA:BAS, BOVESPA:BRKM5, CBT, SWX:CLN, CE, NYSE:CF, CINR, NYSE:CMP, XTRA:1COV, NYSE:UAN, Dow, EMN, XTRA:EVK,NYSE: FOE, HUN, IPHS, TASE: ICL, KPLUY, ENXTAM:DSM, KOP, KRA, KRO, LXS, LYB, TSX:MX, MTX, TSX:NTR, OLN, BMV:ORBIA *,AVNT, SASE:2010,SOLB, LSE:SYNT,CC,NYSE:MOS,NYSE:MOS,TSE,TROX,VNTR,WLK, XTRA:WCH,OB:YARSpecialty: NasdaqGS:AGFS, APD, ENXTAM:AKZA, ALB, AVD, AXTA, BCPC, CCMP, CBM,LSE:CRDA, NYSE:CTVA,NYSE:DD,ECL, ESI, ENTG, FMC, GIVN, FUL, HXL, XTRA:HEN3,NGVT, IFF, ENXTPA:AI, LIN, LONN, NEU, PPG, KWR, RPM, SXT, SY1, SHW, GRA
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
Trading Perspectives by Sector
For additional information on KeyBanc Capital Markets, please contact any of the individuals listed below:Chemicals and Materials Team
Chris HoganManaging Director
Chemicals M&A
216.689.3447
Matthew ColemanAssociate
Chemicals & Materials
917.717.2796
Emma SzoboszlaiAnalyst
Chemicals & Materials
914.552.7594
David RufManaging Director
Head of Chemicals & Materials
212.476.7424
Share Price Performance by Sector Enterprise Value / NTM EBITDA
16.3x
7.1x
11.2x
10-Yr. Avg.
10-Yr. Avg.
(10.0%)
-
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Jun-20 Jun-21Specialties Commodities / Diversified S&P 500
10-Yr. 1-Yr. 3-Mon. 1-Mon.Specialties 182.0% 34.9% 9.3% 0.4%
Commodities / Diversified 23.8% 55.2% 6.7% (2.6%)S&P 500 232.2% 35.2% 6.6% 1.5%
10-Yr. Avg 1-Yr. Avg 3-Mon. Avg. 1-Mon. Avg.Specialties 11.2x 15.8x 16.3x 16.3x
Commodities / Diversified 7.1x 8.8x 8.2x 7.9x
Industrial Investment Banking Round-UpDiversified IndustrialsAs of June 18th, 2021
20.0x
18.6x
21.6x
Diversified Industrials EV / LTM EBITDA Trading Dashboard
19.1x
22.1x
22.0x
18.0x
12.5x
12.9x
Overall, diversified industrials sector valuations have fully recovered, and in most cases exceeded pre-pandemic levels
Manufacturing production %∆ YoYGlobal PMI by IHS Markit
Global Manufacturing PMI & Production 1
Sources: IHS Markit, Wall Street Research; Capital IQ market data as of 6/16/211 PMI shown is a GDP-weighted average of the survey manufacturing and services indices; readings above 50 indicates activity is expanding across the manufacturing sector, while those below 50 signal contractionCapital Goods: CFX, GNRC, LECO, MTW, THR, TNC; Construction: ASTE, CAT, DE, MTW, TEX; Engineered Components: EPAC, HI, KMT, NPO, NVT; Flow Control / Water: AOS, AQUA, BMI, FELE, PNR, WTS, XYL; Food Equipment: ITW, JBT, MIDD, WBT; Industrial Technology: CTS, GGG, IEX, LFUS, NDSN; Large Cap Diversifieds: AME, DOV, EMR, ETN, HON, ITW, JCI, PH; Power Transmission: AIMC, RBC, RXN, TKR; Diversified Index: Average of all indexes
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank
N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
For additional information on KeyBanc Capital Markets, please contact any of the individuals listed below:
Diversified Industrials Team
Chris Brantley
Associate
216.471.2023
Jack Miller
Analy st
317.600.5598
Chris Roehm
Managing Director
312.730.2708
TJ Monico
Managing Director
216.689.3079
Jeff Johnston
Managing Director, M&A
216.689.4115
Recent Trends in Manufacturing
Global Economic Growth Hits 15-year High as Rapid Expansions in US and Europe Offset Subdued Asia Region
• May saw continued acceleration in the pace of expansion of global activity as output and new orders rose at the highest rate since April 2006
– Production rose, despite continued pressure on capacity w ith backlogs at
manufacturers rising at the fastest rate in 17 years
• The Global Manufacturing PMI reached 58.4 in May, a 181-month high
– The rate of increase in services activity outpaced manufacturing production for the
2nd consecutive month and rose at the highest rate in 15 years
– Manufacturing production increased for the 11th consecutive month as new order grow th hit an 11-year high
– Pressure on capacity continued to build during May as average lead times lengthened to the largest extent on record
– Delays in receipt of goods from suppliers coupled w ith higher production caused inf lationary pricing pressure across the supply chain
Research Analysts Earnings Takeaways
• Demand momentum has broadly increased across most end markets as evidenced by recent company commentary; management teams have been positive despite demand being partially offset by ongoing supply / labor shortages and inflation
– Supply chain issues, inflation and labor shortages are expected to continue as near-term challenges, but price increases and volume are
likely to offset any margin contraction concerns
• Most end markets have recovered with commercial aerospace and oil & gas improving but still lagging other end markets
• Inflection point likely in 2H2021 for late-cycle end markets given the positive data points and optimism from management teams
• From a macro perspective, the continued improvement in May supports the broad optimismand likely multi-year recovery
Category Current1-Month
Avg.
r vs.
1-Month
LTM
Avg.
r vs.
LTM
Capital Goods 22.1x 20.8x 1.4x 17.9x 4.2x
Industrial Technology 22.0x 22.4x (0.4x) 21.6x 0.4x
Food Equipment 21.6x 21.9x (0.3x) 19.6x 2.0x
Flow Control / Water 20.0x 20.3x (0.2x) 17.8x 2.2x
Large Cap Diversifieds 19.1x 19.3x (0.2x) 16.6x 2.5x
Diversified Index 18.6x 19.1x (0.5x) 16.9x 1.7x
Construction 18.0x 19.4x (1.4x) 17.9x 0.1x
Power Transmission 12.9x 13.0x (0.1x) 11.9x 1.0x
Engineered Components 12.5x 12.8x (0.2x) 11.4x 1.2x
5.0x
10.0x
15.0x
20.0x
25.0x
Industrial Investment Banking Round-UpIndustrial & Business Services
As of June 18th, 2021
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets
Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
For additional information on KeyBanc Capital Markets, please contact any of the individuals listed below:
Industrial & Business Services Team
Ed Hertz
Director, I&BS
216.689.5006
Steve Meehan
Associate, I&BS
216.689.3494
Luke Korney
Associate, I&BS
216.689.4716
Industrial & Business Services Subsector Median Trading Multiples
Steve Hughes
Managing Director, I&BS
216.689.4101
Field Services Construction Services Engineering & Consulting
Waste & Environmental Staffing / Training / Security Rental Services
Trent Glasser
Analyst, I&BS
216.689.3318
Jeff Johnston
Managing Director, M&A
216.689.4115
Industrial & Business Services Market Perspectives
Senate Democrats and Republicans continue to negotiate the size, specifics and funding mechanism of a large, sweeping
infrastructure package. The most recent proposals from each side place the size between $928 billion and $1.7 trillion dollars, and
leave details around tax increases and climate-focused elements in doubt
• Despite ongoing negotiations on the White House’s proposed infrastructure package, House and Senate committees have
continued to pass smaller, more targeted funding boosts for a variety of infrastructure projects
– The Senate Environment and Public Works Committee unanimously approved a 5-year, $303.5 billion highway bill → a 34% increase
over the funding levels of the 2015 FAST Act
– The Senate Commerce Committee approved a $78 billion, 5-year surface transportation bill, focused on rail and highway safety
– The House Transportation and Infrastructure (T&I) Committee approved a larger, $547 billion, 5-year surface infrastructure bill
– In addition, the House T&I Committee approved a $50 billion plan to improve water and wastewater infrastructure over 5 years
• Recent challenges of the existing power grid infrastructure has led state governments to focus on improving the resiliency and
expanding the capacity of the grid
– Texas lawmakers passed a bill aimed at requiring electric generation and transmission providers to winterize their infrastructure
– The Governor of Nevada has fast-tracked a bill to accelerate the construction a $2 billion Greenlink transmission network to improve
access to renewable energy across the state
• The House narrowly passed a $1.9 billion dollar bill to increase and improve Capitol security
– In addition to funding for National Guard troops, the bill includes funding for retractable fencing and window and door hardening
• AT&T’s decision to exit many of its media assets will help clear up cash for the Company to invest in both its wireless and
broadband infrastructure according to a recent interview with CEO, John Stankey
8.8x 9.4x
12.0x 11.7x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
5.7x
8.3x 9.0x 8.9x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
11.4x 12.8x
16.6x 17.1x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
13.2x 13.4x
14.0x
14.5x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
11.5x
13.8x 14.7x 14.5x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
11.5x
14.9x 16.3x 16.6x
9/30/2020 12/31/2020 3/30/2021 6/16/2021
Industrial Investment Banking Round-UpDistributionAs of June 18th, 2021
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
May-17 Jun-17(15%)
(10%)
(5%)
0%
5%
10%
May-17 Jun-17
Distribution Market Perspectives
• Overall recovery for industrial distributors has slowed following the initial reopening of the economy
• As global economies continue reopening, industrial distributors have been facing post-pandemic challenges including supply shortages, increased operating costs, price competition and isolated outbreaks
– Raw material shortages, including record lumber prices affecting pallet costs, will add significant overhead to everyday operations
– A new tax proposal with a truck-specific travel tax could add additional cost burdens to distributors, although the proposal is likely to see heavy opposition in the near-term
– Truck driver shortage continues to be a major challenge for distributors despite an ~9%-11% hike in driver compensation
– Outbreaks of COVID-19 cases around Chinese ports and a continued shortage in ocean containers further limits global supply chaincapabilities
• Distribution M&A activity remains robust as industry consolidation continues on the back of exceptional share performance, significant capital reserves and potential unfavorable tax regulations
– MSC Industrial acquired metalworking and MRO distributor Wm. F. Hurst, marking MSC’s return to the M&A markets since their most recent acquisition in 2018
– US LBM Holdings acquired J.P. Hart Lumber & Hart Components and American Construction Source US LBM will operate nearly 400 total U.S. locations following the acquisitions
– Winsupply completed the acquisition of Atlantic Coastal Supply, a specialty plumbing product distributor Winsupply has completed three acquisitions this year and eight bolt-on acquisitions since 2020
Sources: Industrial Distribution, Supply Chain Dive, Company Filings1 Leverage = Index Average Net Debt / NTM EBITDADisclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
Public Company 30-Day Stock Performance
(Indexed to 0.0%)
Public Company 30-Day Trading Performance
(EV / NTM EBITDA)
John [email protected]
Will [email protected]
TJ MonicoManaging DirectorHead of [email protected]
Jeff JohnstonManaging DirectorHead of M&[email protected]
For additional information on KeyBanc Capital Markets, please contact any of the Distribution Team individuals listed below:
Note: Market Data as of 6/17/2021; BL / Ind MRO: AIT, BOSN, FAST, GWW, HDS, LAWS, MSM, PKOH, SYX; O&G: DXPE, MRC, DNOW; Tech / E / E: ARW, AVT, BDC, ECM, HWCC, RXL, SNX, TRNS, WCC; Food / Foods: BNZL, CHEF, CORE, PFGC, SYY, UNFI, USFD; Chem: BNR, DKSH, IMCD, UNVR; Vehicle: AAP, AZO, DORM, GPC, LKQ, MPAA, ORLY, SMP, UNS; BP: BECN, BMCH, BLDR, BXC, FERG, FBM, GMS, HDI, RCH; Other: POOL, SITE, WSO
Broadline / Industrial MROOil & Gas
Technology / Electronics / ElectricalFood / Foodservice
ChemicalsVehicle Aftermarket
Building ProductsOther Specialty Distributors
S&P 500
1-Mo. 1-Wk. 1-Yr.
1% (0%) 36%
(1%) 0% 76%
(1%) (3%) 58%
(2%) 0% 57%
(4%) (4%) 64%
(6%) (4%) 35%
(6%) (0%) 32%
(7%) (3%) 47%
(12%) (6%) 38%
Average
Today 1-Mo. 1-Wk. 1-Yr. Lev.1
23.2x 23.5x 23.5x 25.1x 1.3x
16.0x 16.6x 16.4x 14.6x 1.0x
13.0x 13.4x 13.1x 13.0x 1.9x
12.7x 12.8x 12.8x 11.9x 1.9x
12.7x 13.1x 12.9x 13.8x 3.8x
12.3x 13.0x 12.9x 17.8x 2.4x
9.9x 10.1x 9.9x 11.0x 3.1x
9.1x 9.4x 9.3x 9.0x 3.1x
Joe HessSenior [email protected]
1
Global metals & mining review
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc.,
Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
Aluminum
▪ UACJ Automotive Whitehall Industries (‘UWH’), has invested ~$33 million in a new extrusion press at its facility in Ludington, MI
and additional machining equipment at its facility in Flagstaff, AZ. The new extrusion press will have the capability to extrude
high-strength aluminum and will have an annual capacity of 9,000 metric tons. Equipment upgrades at the UWH’s Flagstaff
facility will include machining centers, laser-processing machines, robots and automated assembly equipment. Start-up is
expected in July of 2021
Steel
▪ U.S. Steel has announced plans to invest $450 million over 3 years, to construct a non-grain oriented (‘NGO’) electrical steel line
at Big River Steel in Osceola, AR. The line will focus on serving growing demand from the electric vehicle market. The line will
have the ability to produce thinner gauges (i.e., 0.10mm – 0.50mm) which are not widely available today and the Company
expects >90% of NGO consumption will be 0.25mm – 0.50mm product by 2027. The line will have an annual production capacity
of 200,000 tons and is expected to come online in the 3Q of 2023
▪ Friedman Industries has announced plans to invest $21 million to construct a new 70,000 sq. ft. coil processing facility on the
campus of Steel Dynamics’ new flat-roll steel mill (currently under construction) in Sinton, TX. The facility will expand the size
range and material grades available to Friedman’s coil segment customers and will house one of the world’s largest stretch
leveler, cut-to-length lines, capable of handling material up to 1” thick and 96” wide. The processing facility is expected to
commence operations in the 2Q of 2022
▪ Bull Moose Tube (‘BMT’) has announced plans to construct a new hollow structural section (‘HSS’) and sprinkler pipe mill on the
campus of Steel Dynamics’ new flat-roll steel mill (currently under construction) in Sinton, TX. The mill will be capable of
producing product from 4” – 14” square and from 5” – 18” round in thicknesses from 0.187” – 0.750”, in lengths of up to 80’. BMT
expects to start-up the facility in the 1H of 2023
Copper, Lead and Zinc
▪ Wieland North America is planning to invest $100 million to construct a copper and copper-alloy recycling facility in Shelby
County, KY. The plant will re-melt copper and copper alloy for recycling and use in manufacturing semi-finished copper and
copper alloy products. The investment is part of the Wieland Group’s plans to reach net zero greenhouse gas emissions by
2045. Construction is expected to begin in October 2021 and be completed by the end of 2022.
Specialty & Alloys
▪ Stelco and Primobius have announced plans to work toward creating 50/50 joint venture (‘JV’) for lithium-ion battery recycling,
The two companies are targeting an annual recycling capacity of 20,000 metric tons and will utilize Primobius’ proprietary refining
technology to recover cobalt, nickel, lithium and manganese. Under the agreement, Primobius would operate a dedicated facility
adjacent to Stelco’s proposed vehicle recycling operation. Details on location and timing have not been disclosed
Mining, Scrap and Materials
▪ Zinc Resources is planning to invest $60 million to develop an electric-arc furnace (‘EAF’) dust refinery at the Port of Victoria in
TX. The new facility will refine EAF dust into value added products including Waelz Oxide, a semi-refined zinc product primarily
sold to zinc smelters. The new facility is expected to create 60 jobs, but start date for construction has not been announced
2
Economic commentary
Source: Bloomberg, U.S. Census Bureau, Institute for Supply Management, U.S. Bureau of Economic Analysis
Purchasing Managers Index (PMI) (through May2021)
The U.S. manufacturing PMI
increased to 61.2 in May,
remaining above 50.0 for the
12th consecutive month
An index value over 50.0
indicates expansion in the
manufacturing sector
Construction Put In Place – Annualized and Seasonally Adjusted (through May2021)
According to the U.S.
Census Bureau, April 2021
construction spending totaled
$1,524.2 billion, up by 9.8%
YoY
Gains are attributable to an
increase of 29.5% and a
decrease of (3.9%) in
Residential Construction and
Non-Residential
Construction, respectively
61.2
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
ISM
Pu
rch
as
ing
Ma
na
ge
rs In
de
x (
PM
I)
738.0
786.2
$30
$130
$230
$330
$430
$530
$630
$730
$830
$930
Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21
Billio
ns
of
Do
lla
rs
Residential Non-residential
3
Economic commentary (continued…)
Source: Bloomberg, U.S. Census Bureau, Institute for Supply Management1 Horizontal drilling data includes directional drilling wells
Oil & Gas Drilling Activity – U.S. 1 (June 4, 2021)
U.S. Capacity Utilization (through May29, 2021)
U.S. steel production
increased throughout May
with capacity utilization at
81.5%, up from 78.4% in
April
Mills have produced 38.5
million tons in 2021 at an
average capacity utilization
rate of 77.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2011 2013 2015 2017 2019 2021
% o
f T
ota
l R
ig C
ou
nt
% Horizontal % Vertical
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Oil v
s. G
as
(R
ig C
ou
nt)
Oil Gas
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
May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21
Cap
acity
Utiliz
atio
n (%
)
To
ns
(000s)
Total Production Capacity Utilization
$0
$125
$250
$375
$500
$625
$750
$875
$1,000
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
U.S
. $
/ t
on
Rebar Merchant
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
U.S
. $
/ t
on
HRC CRC HDG Plate
4
Base Metals Prices (through May 2021)
Steel Prices (through May 2021)
Source: American Metal Market
Note: Midwest quotes used for steel pricing
Industry fundamentals
Steel HRC CRC HDG Plate Rebar Merchant
Monthly Avg. ($ / Ton) $1,386 $1,562 $1,585 $1,203 $770 $965
MoM % Change 11.7% 11.3% 11.8% 14.6% 3.3% 9.0%
YoY % Change 215.1% 159.6% 163.7% 146.1% 47.7% 50.8%
Base Metals Aluminum Copper Nickel Zinc
End of Month Price ($ / lb) $0.94 $4.30 $7.63 $1.30
MoM % Change 0.0% 6.0% (1.9%) 2.5%
YoY % Change 71.1% 83.8% 41.1% 48.8%
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
U.S
. $
/ l
b
Aluminum Copper Zinc
$0.00
$3.00
$6.00
$9.00
$12.00
$15.00
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
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
May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21
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
5
Source: World Steel Association, Metals Service Center Institute
MSCI Ending Inventories & Average Daily Shipments (through May 2021)
Monthly Steel Production (LTM through April 2021)
Industry fundamentals (continued…)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21
Mo
nth
ly P
rod
uc
tio
n (
'00
0s
To
ns
)
U.S. China Rest of World
('000s M T) U.S. China Rest of World World Total
LTM Production 73,350 1,100,819 726,639 1,900,808
MoM % Change (2.8%) 4.1% (5.0%) 0.2%
YoY % Change 43.1% 15.1% 38.3% 24.1%
% of World Total 3.9% 57.9% 38.2% 100.0%
6
Ferrous & Non-Ferrous Scrap Prices (through May 2021)
Source: U.S. Census Bureau, American Metal Market1 Scrap trade data through 4/31/2021; $ in millions
Ferrous Monthly Scrap Net Exports 1 Non-Ferrous Monthly Scrap Net Exports 1
Industry fundamentals (continued…)
187.6
274.6
(12.0)
($100)
$0
$100
$200
$300
$400
Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 Apr-21
U.S
. $
in
Millio
ns
Aluminum Scrap Copper Scrap Nickel Scrap
362.6
$0
$100
$200
$300
$400
$500
Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 Apr-21
U.S
. $
in
Millio
ns
Ferrous Scrap
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
U.S
. $
/ l
b
Aluminum Scrap Copper Scrap Nickel Scrap
$0
$100
$200
$300
$400
$500
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21
U.S
. $
/ t
on
Heavy Melt #1 Shredded Auto
Ferrous ($ / ton) Non-ferrous ($ / lb)
Scrap Heavy Melt #1 Shredded Auto Aluminum Scrap Copper Scrap Nickel Scrap
Month Avg. Price $379 $402 $0.74 $4.32 $4.08
MoM % Change 4.9% 4.7% (1.8%) 9.5% (11.3%)
YoY % Change 101.9% 73.5% 86.3% 94.8% 41.9%
Scrap Spread $1,007 $985 $0.20 NM $3.55
May 26, 2021
Carbon Steel: 2Q21 SoS Survey Unveils More of
the Same, Though New Currents on the Horizon
May 31, 2021
Steel - ALERT: June U.S. Ferrous Scrap Market
Catching Up to Export, China Takes Breather
June 11, 2021
Carbon Steel/May MSCI - ALERT: Flat-Rolled
Demand Strong; Restocking Marginal
7
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. In its June 2019 Analyst Awards, ThomsonReuters recognized Phil Gibbs as the #1 earnings estimator in the Metals & Mining sector
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.
Select KeyBanc Capital Markets equity research
June 07, 2021
Steel - ALERT: May China Trade Data Strong, but
Light of Consensus; Steel Exports Moderate
June 08, 2021
X - ALERT: Divests Transtar Assets to Enhance
Balance Sheet
June 01, 2021
SCHN - ALERT: 3Q21 (May) Pre-Release
Reflects Buoyant Results, as Expected
May 20, 2021
TMST: Virtual NDR Highlights; Overweight
May 17, 2021
Carbon Steel - ALERT: U.S. and Europe Chart
Talks to Mend Tariff Fence
Carbon
Steel
Carbon
Steel
Steel
Steel Holiday
Warrior
Carbon
Steel
8
Capital markets update
Source: Capital IQ
Investment Grade and High Yield Bond Spreads (through June 04, 2021)
Bond spreads on all
grades, have continued to
tighten through May
Index Performance (through June 04, 2021)
All KeyBanc’s Metals
indices have
outperformed the broader
market over the past 12
months
Global Producers are up
155.5%, while Service
Centers and Specialty
Metals are up by 125.3%
and 60.2%, respectively
155.5%
125.3%
60.2%
35.9%
(50.0%)
(25.0%)
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
175.0%
200.0%
Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Global Producers Service Centers Specialty Metals S&P 500
92
137
276
433
0
200
400
600
800
1,000
1,200
1,400
Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21
Sp
rea
d t
o M
atu
rity
A Index BBB Index BB Index B Index
9
Source: Bloomberg, Federal Reserve
FED Speak & Economic News
• At the June 16th FOMC meeting, Fed officials signaled that they would keep rates near zero for now, but by the end of 2023, expect to raise
rates twice to around 0.60%. This is a divergence from the previous FOMC meeting in March, where Chairman Powell said rates would hold
steady through the end of 2023. Reasons for the change include higher than expected inflation, “progress on vaccinations,” and “strong policy
support.” The post-meeting statement went further stating as a result of these factors, “indicators of economic activity and employment have
strengthened,” making rate hikes possibly necessary to prevent an overheating economy
• The timing and certainty of these rate increases remain unknown, yet projections released by the 18 officials now say that there is only about
a 27% (13 of 18 officials) chance rates remain at or near zero through 2023, up from 61% (7 of 18 officials). Fed officials have said they want
to fully achieve their overall mandate of full employment and “an average” of 2% inflation before they changed rates
• Pre-meeting speculation had partially centered on whether the Fed would “taper” open-market purchases, but Mr. Powell reiterated the Fed
would continue buying bonds until “substantial further progress” towards its mandate is made; it is not expected that the Fed requires fully
reaching that mandate to slow buying. In the press conference following the meeting, Mr. Powell commented that tapering was “a ways away”
but that “you can think about this meeting as the ‘talking about talking about tapering’ if you like”
• During the week leading into the meeting, the 10-Year rose six basis points. In the hours after the meeting, the markets dropped only slightly,
signaling a consensus that while rates will rise, the increase will be manageable
• Moving forward, monitoring the root causes of inflation such as infrastructure spending, labor participation rates, consumer spending, and
wages will be key in determining if the Fed will change its guidance again, whether pushing the timeline up, or pushing it back
Capital markets update (continued…)
USD Swap Curve Activity (through June 11, 2021)
USD swap rates saw a decrease from the first week of June,
specifically at the longer end of the curve
The 10-year USD mid-market swap rate was down 35 bps from
its high seen at the end of March, having dropped from 1.78% to
the June 11 level of 1.43%, a level not seen since February
Both U.S. Treasury yields and USD swap rates decreased in the
week ending June 11, amid lessening concerns from market
participants over persistently higher inflation levels and the Fed
tapering sooner rather than later
Current Rate Snapshot (as of June 14, 2021)
Source: Bloomberg
Friday Prior Week Change
1-Month LIBOR 0.07% 0.08% (0.01% )
3-Month LIBOR 0.12% 0.13% (0.01% )
SOFR 0.01% 0.01% 0.00%
Fed Funds 0.25% 0.25% 0.00%
Fed Discount 2.75% 2.75% 0.00%
Prime 3.25% 3.25% 0.00%
US Treasury Yields
2-year Treasury 0.15% 0.15% 0.00%
5-year Treasury 0.74% 0.78% (0.04% )
10-year Treasury 1.45% 1.56% (0.11% )
Swaps vs. 3M LIBOR
2-year 0.22% 0.22% 0.00%
5-year 0.82% 0.86% (0.04% )
10-year 1.43% 1.53% (0.10% )
0.0%
1.0%
2.0%
3.0%
3M 1Y 2Y 3Y 4Y 5Y 7Y 10Y 30Y
Friday Prior Week Prior Month 12-mo High
The USD swap curve plots mid-
market swap rates for various
maturities; each line represents the
curve on a different date
10
Source: American Metal Market, The Daily Deal, MergerMarket
Select recent transaction activity
ClosedAcquirer
(Parent)
Target
(Seller)Highlights
Pending
Fortress
Transportation and
Infrastructure
Investors LLC
(NYSE FTAI)
Transtar LLC
(United States Steel
Corporation,
NYSE:X)
▪ U.S. Steel has agreed to sell its rail transportation business to an affiliate of Fortress
Transportation and Infrastructure Investors LLC for $640 million by the end of the 3Q of 2021
▪ The transaction will help U.S. Steel align its operating focus on core mining and steelmaking
activities, while strengthening and deleveraging its balance
PendingNucor
(NYSE:NUE)
Insulated Metal
Panels Business
(Cornerstone
Building Brands)
▪ Nucor has agreed to acquire Cornerstone Building Brands’ Insulated Metal Panels Business
for $1 billion, or ~10x pre-pandemic EBITDA inclusive of expected synergies
▪ The transaction broadens Nucor Buildings Group’s value-added solutions offering with new
capabilities to serve customers in high-end architectural applications and more functional cold
storage / warehousing applications
PendingJ.D. Rush
Company, Inc.
Kelly OCTG
(Kelly Pipe, JFE
Holdings, Inc.,
TSE:5411)
▪ J.D. Rush has agreed to acquire Kelly OCTG, a division of Kelly Pipe
▪ The Transaction is highly complementary to J.D. Rush’s existing product offering in electric-
resistance welded (‘ERW’) and seamless OCTG products
6/8/2021Ameriforge LLC
(AFG Holdings)
Maass Flange
Corporation
▪ AFG Holdings has acquired Maass Flange Corp. and merged the business with AFG’s
Ameriforge operations
▪ Maass’ market leading position in stainless and nickel alloy flanges aligns well with AFG’s
market leadership in carbon flanged and creates a leading forged products platform
6/8/2021
TWB Company
(Worthington
Industries, Inc.,
NYSE:WOR)
Certain Assets of
U.S. BlankLight®
Business
(Shiloh Industries,
Inc.)
▪ TWB Company, a 55/45 JV between Worthington and Baoshan Iron & Steel Co., has acquired
certain assets of Shiloh Industries’ U.S. BlankLight ® business for $105 million, or ~5.1x 2020
EBITDA
▪ The transaction expands the size Worthington’s laser-welded products JV, adding three
facilities and a blanking facility for its Steel Processing business
6/2/2021
Polished Metals
Limited
(Sky Island Capital)
Pride Metal
Polishing Inc.
▪ Polished Metals has acquired Pride Metal Polishing
▪ The transaction allows Polished Metals to grow its customer base and build out its presence
on the West Coast
5/27/2021
DBM Global Inc.
(HC2 Holdings,
NYSE:HCHC)
Banker Steel
Company, LLC
(Atlas Holdings)
▪ Banker Steel has been acquired by DBM Global
▪ The transaction strengthens DBM’s market position as the largest steel fabrication and
erection company in the U.S. while enhancing the platform’s geographic diversity
5/4/2021M-D Building
Products
Cardinal Aluminum
Company
▪ M-D Building Products has acquired Cardinal Aluminum Company
▪ The acquisition expands M-D Building’s custom aluminum extrusion, finishing and fabricating
product portfolio and manufacturing capabilities
11
Source: American Metal Market, The Daily Deal, MergerMarket
Recent capital markets’ activity
Closed Company Gross Offering Size Highlights
6/10/2021Ryerson Holding
Corporation
$107 million Sale-Lease
Back
▪ Sold a portfolio of 11 industrial assets via a sale-leaseback transaction
▪ KeyBanc acted as Exclusive Financial Advisor to Ryerson Holing
Corporation on the transaction
05/20/2021 Atkore International $400 million Term Loan B▪ $400 million Term Loan B at L+200 due 2028
▪ The proceeds will be used for debt repayment and general corporate purposes
05/18/2021 Atkore International$400 million Senior
Unsecured Notes
▪ $400 million Senior Unsecured Notes at 4.25% due 2031
▪ The proceeds will be used for debt repayment and general corporate purposes
05/11/2021 Kaiser Aluminum Corp $550 million Senior Notes▪ $550 million Senior Unsecured Notes at 4.50% due 2031
▪ The proceeds will be used for general corporate purposes
$ in millions, except per share data Prices
as of Market Enterprise LTM CY 2021 LTM CY 2021
Company Ticker 6/11/2021 Cap Value Sales EBITDA % Margin EPS EBITDA EPS EV / EBITDA P/E Ratio EV / EBITDA P/E Ratio
ArcelorMittal ENXTAM:MT $33.02 $35,657 $43,530 $54,619 $6,576 12.0% $1.62 $13,607 $6.76 NM 20.3x 3.2x 4.9x
Companhia Siderúrgica Nacional BOVESPA:CSNA3 8.86 12,222 16,722 7,132 2,493 35.0% 1.42 4,792 1.79 6.7x 6.2x 3.5x 5.0x
Gerdau S.A. BOVESPA:GGBR4 6.42 10,953 13,097 9,913 2,076 20.9% 0.53 3,368 1.15 6.3x 12.1x 3.9x 5.6x
Grupo Simec, S.A.B. de C.V. NYSEAM:SIM 25.21 3,892 3,466 2,049 418 20.4% 1.49 595 NA 8.3x 16.9x 5.8x NA
PAO Severstal LSE:SVST 23.98 19,733 21,079 7,349 3,032 41.3% 1.87 4,507 3.33 7.0x 12.8x 4.7x 7.2x
SSAB AB (publ) OM:SSAB A 5.35 5,507 6,375 7,963 593 7.5% 0.10 1,590 0.81 10.7x NM 4.0x 6.6x
Tata Steel Limited 500470 15.83 18,971 28,632 21,343 4,218 19.8% 0.96 5,337 1.91 6.8x 16.5x 5.4x 8.3x
thyssenkrupp AG XTRA:TKA 12.12 7,545 2,971 34,985 2,117 6.1% (3.17) 2,169 0.23 1.4x NM 1.4x NM
Average $14,310 $16,984 $18,169 $2,690 20.4% $4,496 6.7x 14.1x 4.0x 6.3x
Median $11,588 $14,910 $8,938 $2,305 20.1% $3,938 6.8x 14.6x 3.9x 6.1x
Cleveland-Cliffs Inc. CLF $24.44 $12,237 $18,929 $16,527 $1,821 11.0% ($0.81) $4,278 $4.44 NM NM 4.4x 5.5x
Commercial Metals Company CMC $33.10 $4,063 $4,730 $5,605 $564 10.1% $2.10 $659 $2.59 8.4x 15.7x 7.2x 12.8x
Nucor Corporation NUE 106.59 32,114 35,005 21,532 3,257 15.1% 6.29 6,473 12.75 10.7x 16.9x 5.4x 8.4x
Steel Dynamics, Inc. STLD 65.01 13,731 15,590 10,571 1,487 14.1% 3.86 3,287 9.97 10.5x 16.8x 4.7x 6.5x
United States Steel Corporation X 28.66 7,731 12,903 10,657 325 3.0% (1.52) 3,723 8.68 NM NM 3.5x 3.3x
Average $13,975 $17,431 $12,978 $1,491 10.7% $3,684 9.9x 16.5x 5.0x 7.3x
Median $12,237 $15,590 $10,657 $1,487 11.0% $3,684 9.9x 16.8x 4.7x 6.5x
Olympic Steel Inc. ZEUS $35.12 $411 $595 $1,343 $52 3.9% $1.62 $105 $4.88 11.3x 21.7x 5.7x 7.2x
Reliance Steel & Aluminum Co. RS 173.27 11,039 11,929 9,077 1,053 11.6% 9.45 1,532 15.31 11.3x 18.3x 7.8x 11.3x
Russel Metals Inc. TSX:RUS 28.46 1,810 2,064 2,269 205 9.0% 1.65 294 2.65 10.1x 17.3x 7.0x 10.7x
Ryerson Holding Corporation RYI 15.39 592 1,296 3,604 114 3.2% (0.02) 201 1.65 11.4x NM 6.4x 9.3x
Worthington Industries, Inc. WOR 64.85 3,436 3,647 2,805 364 13.0% 3.87 396 4.10 10.0x 16.8x 9.2x 15.8x
Average $3,458 $3,906 $3,820 $358 8.1% $506 10.8x 18.5x 7.2x 10.9x
Median $1,810 $2,064 $2,805 $205 9.0% $294 11.3x 17.8x 7.0x 10.7x
ALBA SE DB:ABA $87.70 $859 $867 $317 $2 0.6% ($0.13) NA NA NM NM NA NA
Schnitzer Steel Industries, Inc. SCHN 55.89 1,524 1,688 1,959 159 8.1% 2.37 286 5.71 10.6x 23.6x 5.9x 9.8x
Sims Limited ASX:SGM 12.85 2,584 2,436 3,586 175 4.9% (0.19) 310 0.75 13.9x NM 7.9x 17.1x
Average $1,656 $1,664 $1,954 $112 4.5% $298 12.3x 23.6x 6.9x 13.4x
Median $1,524 $1,688 $1,959 $159 4.9% $298 12.3x 23.6x 6.9x 13.4x
Allegheny Technologies Incorporated ATI $23.81 $3,029 $4,228 $2,719 $160 5.9% ($3.65) $234 ($0.23) NM NM 18.1x NM
Carpenter Technology Corporation CRS 44.32 2,129 2,579 1,491 (2) (0.1%) (2.22) 83 (1.42) NM NM NM NM
Haynes International, Inc. HAYN 37.00 481 420 315 (9) (3.0%) (2.64) 20 (0.15) NM NM 20.6x NM
Kaiser Aluminum Corporation KALU 134.10 2,159 2,869 1,127 132 11.7% (5.02) 227 5.79 21.8x NM 12.6x 23.2x
Materion Corporation MTRN 77.98 1,623 1,657 1,253 108 8.6% 2.84 129 3.16 15.4x 27.5x 12.9x 24.7x
Universal Stainless & Alloy Products, Inc. USAP 11.67 104 155 158 6 3.5% (1.39) 9 (1.05) NM NM 16.9x NM
Average $1,587 $1,984 $1,177 $66 4.4% $117 18.6x 27.5x 16.2x 23.9x
Median $1,876 $2,118 $1,190 $57 4.7% $106 18.6x 27.5x 16.9x 23.9x
Inte
rnati
on
al
Pro
du
cers
Do
mesti
c P
rod
uce
Sp
ecia
lty M
eta
ls &
All
oys
Scra
p
Recycli
ng
Serv
ice C
en
ters
/
Pro
cesso
rs
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
13
Source: CapitalIQ, ThomsonReuters, SEC Filings
Metals public credit statistics
$ 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 $11,365 $5,891 1.7x 0.9x 22.9% 11.9% 16.6x
Companhia Siderúrgica Nacional BOVESPA:CSNA3 6,645 3,938 2.7x 1.6x 70.4% 41.7% 5.6x
Gerdau S.A. BOVESPA:GGBR4 3,458 2,095 1.7x 1.0x 34.0% 20.6% 7.4x
Grupo Simec, S.A.B. de C.V. NYSEAM:SIM 0 (429) NM NM 0.0% NM NM
PAO Severstal LSE:SVST 2,510 1,581 0.8x 0.5x 42.7% 26.9% NM
SSAB AB (publ) OM:SSAB A 1,516 855 2.6x 1.4x 17.8% 10.0% 2.0x
Tata Steel Limited 500470 11,184 9,215 2.7x 2.2x 52.5% 43.2% 4.1x
thyssenkrupp AG XTRA:TKA 6,680 (5,105) 3.2x NM 35.6% NM 1.5x
Average $5,420 $2,255 2.2x 1.3x 34.5% 25.7% 6.2x
Median $5,051 $1,838 2.6x 1.2x 34.8% 23.8% 4.9x
Cleveland-Cliffs Inc. CLF $5,734 $5,624 3.1x 3.1x 70.6% 69.2% 4.8x
Commercial Metals Company CMC $1,034 $666 1.8x 1.2x 34.0% 21.9% 9.8x
Nucor Corporation NUE 5,340 2,477 1.6x 0.8x 31.8% 14.8% NM
Steel Dynamics, Inc. STLD 3,097 1,852 2.1x 1.2x 39.6% 23.7% 17.7x
United States Steel Corporation X 5,832 5,079 NM NM 55.8% 48.6% 1.2x
Average $4,207 $3,140 2.2x 1.6x 46.3% 35.6% 8.4x
Median $5,340 $2,477 2.0x 1.2x 39.6% 23.7% 7.3x
Olympic Steel, Inc. ZEUS $192 $184 3.7x 3.5x 37.2% 35.6% 7.7x
Reliance Steel & Aluminum Co. RS 1,645 885 1.6x 0.8x 23.5% 12.7% 17.1x
Russel Metals Inc. TSX:RUS 330 254 1.6x 1.2x 30.1% 23.2% 7.4x
Ryerson Holding Corporation RYI 881 838 7.7x 7.4x 83.5% 82.7% 1.7x
Worthington Industries, Inc. WOR 709 59 1.9x 0.2x 46.3% 3.9% 12.1x
Average $751 $444 3.3x 2.6x 44.1% 31.6% 9.2x
Median $709 $254 1.9x 1.2x 37.2% 23.2% 7.7x
ALBA SE DB:ABA $8 $8 4.6x 4.3x 4.7% 4.4% NM
Schnitzer Steel Industries, Inc. SCHN 171 159 1.1x 1.0x 19.0% 17.7% 17.8x
Sims Limited ASX:SGM 90 (148) 0.5x NM 5.7% NM 15.9x
Average $90 $6 2.1x 2.7x 9.8% 11.1% 16.9x
Median $90 $8 1.1x 2.7x 5.7% 11.1% 16.9x
Allegheny Technologies Incorporated ATI $1,614 $1,072 NM NM 77.0% 51.1% 1.7x
Carpenter Technology Corporation CRS 694 450 NM NM 33.5% 21.7% NM
Haynes International, Inc. HAYN 8 (61) NM NM 2.8% NM NM
Kaiser Aluminum Corporation KALU 839 711 NM NM 53.3% 45.2% 2.8x
Materion Corporation MTRN 53 34 0.5x 0.3x 7.4% 4.8% NM
Universal Stainless & Alloy Products, Inc. USAP 52 51 NM NM 18.9% 18.7% 2.3x
Average $543 $376 0.5x 0.3x 32.1% 28.3% 2.3x
Median $374 $251 0.5x 0.3x 26.2% 21.7% 2.3x
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Client Business Description
Deal Value
($ mm) Type Closed
Ryerson Inc. Processor and distributor of metals $107 Sale-Leaseback Jun-21
DMC GlobalManufacturer of well perforation systems for the oil &
gas industry and explosion-welded clad metal plate$129 Follow-On May-21
Canam Steel CorporationManufacturer of steel joist and deck for applications in
non-residential construction$140
Senior Secured Credit
FacilitiesMar-21
Amico-
Gibraltar
Manufacturer of expanded and perforated metal
products ND Sell-Side Advisor Feb-21
American Securities -
NN Life Sciences
Manufacturer of high-precision metal and plastic
components $825 Buy-Side Advisor Aug-20
NN Life SciencesManufactures high-precision metal and plastic
components $485 Senior Secured Credit Facility Aug-20
Reliance Steel & Aluminum Processor and distributor of metals $900 Senior Notes Jul-20
Ryerson Inc. Processor and distributor of metals $500 Senior Secured Notes Jul-20
Kymera International Producer of specialty, non-ferrous metal powders $185Senior Secured Credit
FacilitiesMar-20
NN Inc.Manufacturer of metal bearing components, plastic and
rubber components, and precision metal components$345
Senior Secured Credit
FacilitiesDec-19
Zochem Manufacturer of zinc oxide $70Senior Secured Revolving
Credit FacilityDec-19
Navajo Transitional Energy Company Miner of coal reserves on the Navajo Nation $25 Senior Revolving Credit Facility Oct-19
Venture Metals LLC Processor of non-ferrous scrap metal $125+Senior Secured Revolving
Credit FacilitesSep-19
Versatile Processing Group Processor of non-ferrous scrap metal ND Sell Side Advisor Jul-19
Johnstown Wire Technologies Producer of cold-drawn steel wire products ND Sell Side Advisor Jun-19
ATI Manufacturer of complex forgings for blue-chip OEMs ND Sell Side Advisor Jun-19
Ellwood GroupGlobal manufacturer of high-quality, engineered, heavy
metal components$150
Senior Unsecured Revolving
Credit FacilitiesMay-19
Kymera International Producer of specialty, non-ferrous metal powders $275 Senior Secured Credit Facilites Oct-18
Palladium Equity Partners -
Kymera InternationalProducer of specialty, non-ferrous metal powders $275 Buy Side Advisor Oct-18
NN Inc.Manufacturer of metal bearing components, plastic and
rubber components, and precision metal components$230 Follow-On Sep-18
14
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For additional information about KeyBanc Capital Markets, contact:
Metals & Mining Team
Eric Klenz
216.689.3974
Arindam Basu
216.689.4262
Barry Stormer
216.689.7921
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc.,
Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.
Select transaction experience
Industrial Investment Banking Round-UpPaper and PackagingAs of June 18th, 2021
Mergers & Acquisitions
Strategic
• Superior Press acquired All Service Graphics
• Heeter acquired Duke Print & Mail Solutions
• Prisma acquired Parris Printing and TruColor Litho
• Thysse acquired the assets of Badger Group
• Smart Source acquired the majority of assets of Superior Business Solutions
• Specialty Print Communications acquired FuelPop Marketing
• Ennis acquired the assets of AmeriPrint Corporation
• TC Transcontinental acquired BGI Retail
• Millcraft Paper Company acquired the assets of Dennis Paper Company
• ST Paper will purchase Verso Corp.'s idled Duluth mill and convert it to produce tissue
Private Equity
• Oak Hill Capital Partners acquired a majority stake in Technimark from PPC Partners
• Innovations in Nutrition + Wellness, owned by Cornell Capital, acquired Capstone Nutrition from Brightstar Capital Partners
• Spectrum Plastics, owned by AEA Investors, acquired substantially all assets of KCS Plastics
• Soteria Flexibles, owned by Ardian North America Buyouts, acquired Redi-Bag
• The Sterling Group announced the formation of a new PET recycling platform company, Evergreen. Sterling executed the carve-out of Evergreen, the recycling division of current portfolio company, Greenbridge Packaging, and merged it with the Riverside, California assets of CarbonLITE, acquired through a 363 bankruptcy process.
• Dallas Plastics, owned by Sole Source Capital, acquired Hi-De Liners
• Imperial Dade, owned by Bain Capital, acquired Moresco Distributing Company
• Imperial Dade, owned by Bain Capital, acquired East Continental Supplies
• Arizona Natural Resources, owned by CORE Industrial Partners, acquired Marianna Beauty Holdings
• 48forty Solutions, owned by Audax Private Equity, acquired Prime360
• Printful received a $130 million investment from Bregal Sagemount
• Novolex, owned by The Carlyle Group, acquired Flexo Converters USA
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and 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 entity.