November 22, 2008

Reliance Steel to acquire PNA Group

Reliance Steel & Aluminum Co announced that it has reached an agreement to acquire the outstanding capital stock of PNA Group Holding Corporation, a national steel service center group owned by Platinum Equity. The transaction is valued at approximately USD 1.1 billion.

PNA’s subsidiaries include the operating entities Delta Steel LP, Feralloy Corporation, Infra Metals Co, Metals Supply Company Ltd, Precision Flamecutting and Steel LP and Sugar Steel Corporation. Through its subsidiaries, PNA processes and distributes primarily carbon steel plate, bar, structural and flat rolled products.

The transaction is expected to be consummated within the next 60 days, subject to the satisfaction of certain conditions, including obtaining required regulatory approvals. Reliance expects to finance the transaction, including the replacement of PNA’s existing debt, through a combination of borrowings under Reliance’s existing credit facility and by raising approximately USD 750 million through the issuance of a combination of new debt and equity securities.

Mr David H Hannah chairman & CEO of Reliance Steel said that “The PNA operations complement our existing business and add new products in many geographic areas that further enhance the customer, product and geographic diversification of our business. Through the PNA joint ventures, we also gain entry into a new market for us in Mexico. We expect that this transaction, including the impact of the expected financing, will be immediately accretive to our earnings, with the dilution from any new shares issued offset by the earnings from PNA and savings from our lower cost of capital. Additionally, we expect our balance sheet and liquidity to remain strong.”