Metals USA IPO a Win for Apollo

Posted Apr 9th 2010 1:40PM by Tom Taulli
Filed under: Private Equity, Initial Public Offerings

Metals USA MUSA logo Private equity firm Apollo Management raised $239.4 million in an IPO for its portfolio company, Metals USA Holdings Corp. (MUSA). The offering came to $20 per share, which was at the top of the $18 to $20 range. In all, Apollo has realized a tidy 266% return on its investment (since 2005).

This was good news for Apollo, which just this week had to scrap its $2.4 billion deal for Cedar Fair (FUN).

Metals USA is a provider of processed carbon steels, aluminum and roofing products. Customers are mainly in North America.

As should be no surprise, the financials have been lackluster. Last year, Metals USA generated $3.5 million in earnings on $1.1 billion of revenues. This compares to $72.6 million in earnings, with $2.16 billion in revenues, for 2008.

Yet, with the real estate market coming back, Metals USA should benefit nicely. Given its lower cost structure, the cash flows should increase significantly in 2010. And with the IPO proceeds, Metals USA plans to reduce its debt load, which should improve the risk profile.

In morning trading, the shares of the company were up 1%.

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: Apollo Management, Metals USA, private equity

Print this

Reader Comments (Page 1 of 1)

4-29-2010 @ 8:38AM

Kaichallyn gouisy said...

Very nice comments here so I like it......

5-05-2010 @ 6:13AM

Jikkyionly hision said...

Of course, what a great site and informative posts
Well...i think that it is a big good news for everyone. I like this blog and its contents are also very good and wrothtful.

5-20-2010 @ 4:41AM

Jivionyhilter hilter said...

Today, I visited this forum so I found that it's very interested for me..There are many topics available here so I like this so much.....
I hope that you will read care fully and tell me more benefits about this .........