AZZ Acquires Precoat Metals for $1.28B in Latest in a String of Deals

“We are pleased to acquire North America’s largest independent provider of metal coil coatings and related services,” AZZ CEO Tom Ferguson said. “Through this acquisition, AZZ significantly broadens our metal coatings offering, creating unrivaled scale and breadth of solutions in both the prepainted and post-fabrication coatings markets.” 

Headquartered in St. Louis, Mo., Precoat is a provider of steel and aluminum coil coating solutions for the construction, appliance, heating, HVAC, container and transportation markets. Precoat’s 1,100 employees operate a network of 13 manufacturing facilities with 15 coating lines and 17 value-added processing lines. Precoat generated revenue of $700 million in 2021. The purchase price represents about 8.2x the company’s adjusted EBITDA.

AZZ’s stated strategy has been to acquire coatings targets with a strong strategic fit in North America, with the goal of becoming a focused provider of coating and galvanizing services for critical applications. “We believe the coil coating market will provide sustainable future growth for AZZ, and we intend to provide Precoat with the financial resources to expand and further invest in commercial and operational excellence,” Ferguson added.

“This is an exciting milestone for Precoat Metals,” said Kurt Russell, president of Precoat. “Through our 60-year history, Precoat has been part of several great organizations, and I believe AZZ is an excellent cultural fit for our company. This acquisition provides a great opportunity for Precoat to continue our core growth strategies in support of our customers, while bringing a level of diversification to AZZ’s existing strong metal coating and finishing capabilities.”

The transaction is expected to close in the first quarter of AZZ’s fiscal year 2023.

Other recent strategic acquisitions for AZZ include Steel Creek Galvanizing Co., a hot-dip galvanizer based in Blacksburg, S.C., and Milwaukee-based hot-dip galvanizing and zinc electroplating company Acme Galvanizing Inc. Over the past few years, AZZ also has made deals to acquire Dallas-Fort Worth area powder coating company Preferred Industries; Jasper, Tenn.-based galvanizer Tennessee Galvanizing; and electroplating company NuZinc, also located in the Dallas-Fort Worth area.

Sequa Corp., a portfolio company of global investment firm Carlyle, is a diversified industrial company with operations in the aerospace, energy and metal coatings industries through its Chromalloy and Precoat Metals business units.

By Tim Triplett, Tim@SteelMarketUpdate.com