H.I.G. Capital Acquires CitiSteel USA, Inc.
June 10, 2005 – H.I.G. Capital, a Miami-based private equity firm, announced today that it has acquired CitiSteel USA, Inc. from the Chinese International Trust and Investment Corporation (“CITIC”). CitiSteel operates a steel mini-mill specializing in the manufacture and sale of custom-order discrete steel plate in the United States and Canada. CitiSteel’s manufacturing facility in Claymont, Delaware has the capacity to produce over 400,000 tons of steel plate annually. Its current annual revenues are approximately $300 million.
CitiSteel provides custom-order discrete steel plate for a variety of end use applications including bridges, railcars, tool & die manufacture, and specialty machine & equipment manufacture. CitiSteel’s specialized production facilities are specifically configured to provide custom-sized steel plate in small order sizes and on short lead times, which gives it a strong advantage over commodity-oriented domestic steel plate manufacturers which are physically unable to produce a significant portion of Citisteel’s product range. The company’s market leading status is reflected by its #1 ranking in end user customer satisfaction in the annual Jacobson & Associates industry-wide survey for four of the last five years.
“Over 75% of current production is of custom sizes, which gives CitiSteel a very strong and defensible position relative to both larger mini-mills and imports,” said Jeff Bradley, Executive Chairman of CitiSteel USA. Bradley, who left Worthington Industries (NYSE: WOR) after more than twenty years to join CitiSteel, added: “It took a very special opportunity for me to leave Worthington, and the chance to partner with H.I.G. to acquire the market leading custom steel plate producer was it.”
Matt Sanford of H.I.G. commented, “We are very pleased to have had the opportunity to join forces with Jeff and a very strong existing CitiSteel management team. The company is exceptionally well-positioned to capitalize on the favorable competitive dynamics in the U.S. steel industry and the long-term upswing in global steel demand. CITIC did an excellent job of growing this business through a variety of market conditions and we intend to build on this legacy by continuing to increase CitiSteel’s penetration into both new and existing markets.”
Jeff Zanarini, also of H.I.G. Capital, added: “CitiSteel is a market leader with a defensible market niche, limited competition, an excellent operational team, and a loyal and diverse customer base.”
H.I.G. Capital, L.L.C. is a leading private equity and venture capital investment firm with more than $2 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, and San Francisco, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well-managed manufacturing or service businesses, and in promising early-stage technology companies. The firm currently has a controlling interest in more than 40 companies with combined revenues in excess of $5 billion. For more information, please refer to the H.I.G. website at www.hig.com.
For more information about the Company, please visit www.citisteel.com.