Nucor Corp. is bullish on steel. The Charlotte, N.C.-based company said it will raise at least $3 billion from sales of stock and debt, and plans to use the proceeds for general corporate purposes, including acquisitions, capital expenditures, working capital needs and repayment of debt.
The largest U.S. steelmaker, as measured by market capitalization, said it has begun offering 25 million shares of common stock. At its current price of $82 per share, that works out to about $2 billion. Nucor officials said the company has granted the underwriters an option to purchase up to an additional 3,750,000 shares of common stock at the offering price, which would raise an additional $300,000.
Further, Nucor intends to raise up to $1 billion in the debt capital markets in the near term, subject to market conditions.
Banc of America Securities, Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are acting as joint book-running managers for the offering. Reportedly, the company is investing in acquisitions and new projects in the U.S. and Europe to boost production and gain greater control of raw-material supplies as costs rise, noted Bloomberg.
The wire service added that in April, chief executive officer Dan DiMiccohe committed to spending “billions” of dollars to increase international sales above the current 10 percent of total output to take advantage of the weak dollar and higher prices in other parts of the world.
The company has been on a bit of a buying spree. On Monday, CFO.com reported that Nucor was expected to buy a 50 percent stake in Italian joint venture Duferdofin-Nucor for $659 million. The deal valuation is about 6.3 times adjusted EBITDA of the new venture, and the transaction is expected to close by the third quarter of this year. In February, the steelmaker announced its plan to buy scrap metal processor and trader David J. Joseph Co., for $1.44 billion.