Platinum Equity announced today that it has completed the sale of portfolio company PNA Group, a leading processor and distributor of metals products, to Reliance Steel & Aluminum Co. (NYSE:RS) in a transaction valued at approximately $1.1 billion.
The divestiture transaction was previously announced in June. Platinum acquired PNA Group in May, 2006 and created substantial value in the business through a combination of operational initiatives and add-on acquisitions. PNA’s revenue in 2007 was approximately $1.6 billion, up from approximately $1.2 billion in annual revenue when Platinum acquired the business.
“PNA’s extraordinary value today is a reflection of strong leadership, hard work and an unrelenting focus on operational excellence,” said Tom Gores, Chairman and CEO of Platinum Equity. “PNA was an outstanding investment for Platinum and our investors, and will be a valuable asset to Reliance Steel & Aluminum.”
In divesting the business, Platinum executives said their success with the PNA investment demonstrates the importance of a hands-on operational approach in the current economic environment.
“This environment demands real hands-on operational skills,” said Jacob Kotzubei, the Platinum partner who led the PNA transaction. “You can’t leverage your way out of a problem, or rely on financial engineering to create a higher exit multiple. You have to be able to roll up your sleeves, execute on the ground to improve operations in a comprehensive way, and implement a growth strategy that creates real enterprise value. Platinum has the resources and the track record to execute that kind of operational strategy, and this investment, among others, demonstrates the success of that model.”
About Platinum Equity
Platinum Equity (www.platinumequity.com) is a global M&A&O® firm specializing in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, telecommunications, logistics, metals services, manufacturing and distribution. Since its founding in 1995 by entrepreneur Tom Gores, Platinum Equity has acquired more than 80 businesses with more than $27.5 billion in aggregate revenue at time of acquisition.