Nucor to Acquire Insulated Metal Panels from Cornerstone Building Brands

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Nucor Corporation announced the signing of a definitive purchase agreement to acquire Cornerstone Building Brands’ insulated metal panels (IMP) business for $1 billion in cash, or approximately 10 times pre-pandemic EBITDA inclusive of expected synergies.

Nucor’s realized effective purchase price is around $900 million after adjusting for the net present value of associated tax benefits.

Depending on regulatory approvals, the transaction is expected to close later this year.

“Today’s announcement accelerates our vision to broaden value-added solutions that Nucor provides to our targeted end markets. Additionally, it enhances our strong financial position with attractive free cash flow conversion rates and accretive EBITDA margins,” Nucor’s President and Chief Executive Officer, Leon Topalian, stated.

“We are excited about this opportunity to acquire a historical leader and innovator in the quickly growing IMP product category serving the non-residential market. We are committed to finding new and better ways to meet our customers’ needs, and this acquisition is an excellent fit with Nucor’s long-term strategy to grow our core business and expand our product portfolio.”

IMP products are wall and roof panel solutions that are made up of an energy-efficient foam core sandwiched between two layers of steel or aluminum and come in a variety of widths, thicknesses, and exterior finishes.

Nucor is acquiring Cornerstone Building Brands’ IMP business, which has seven manufacturing facilities across North America.

These locations supplement Nucor Buildings Group’s footprint as well as the company’s existing IMP business, TrueCore.

Nucor will acquire two valuable legacy brands, CENTRIA and Metl-Span, which provide a full range of products ranging from high-end architectural applications to more functional and rapidly expanding cold storage and warehousing applications.

As businesses and institutions continue to prioritize environmental factors, the superior insulation performance of IMP products reduces energy consumption and overall operations-related GHG emissions.

Furthermore, IMP products are easier to install and require less maintenance than other insulation solutions.

Demand for IMP products is expected to grow at double-digit annual rates over the next decade, driven by changing consumer preferences for e-commerce and grocery delivery, as well as the expansion of data centers and server farms, all of which require temperature-controlled climates.

“I look forward to enthusiastically welcoming our new teammates from Cornerstone Building Brands to the Nucor family. Adding this business to Nucor Buildings Group will allow us to build upon our recent success with TrueCore,” Nucor Buildings Group President Jeff Carmean said.

“This acquisition will accelerate our growth plans for Nucor Insulated Panel Group and enable us to offer our customers a full suite of solutions.”

Nucor Corporation’s exclusive financial advisor for this transaction was Moelis & Company LLC, and its legal counsel was Moore & Van Allen PLLC.

Owen is one of our main correspondents based out of New York.