Acquisitions

12 Months Ended

Dec. 31, 2024

Acquisitions

Acquisitions

Note 2. Acquisitions

On February 1, 2024, we acquired, with cash on hand, Cooksey Iron & Metal Company (“Cooksey Steel”), a metals service center that processes and distributes finished steel products, including tubing, beams, plates and bars. Headquartered in Tifton, Georgia, Cooksey Steel operates three locations, servicing a diverse range of customers.

On April 1, 2024, we acquired American Alloy Steel, Inc. (“American Alloy”) with cash on hand. American Alloy, headquartered in Houston, Texas, operates five metals service centers and a plate fabrication business in the U.S. American Alloy is a distributor of specialty carbon and alloy steel plate and round bar, including pressure vessel quality (PVQ) material.

On April 1, 2024, we acquired, with cash on hand, Mid-West Materials, Inc. (“MidWest Materials”), a flat-rolled steel service center that primarily services North American original equipment manufacturers. Headquartered in Perry, Ohio, MidWest Materials provides steel products including hot-rolled, high strength hot-rolled, coated, and cold-rolled products that are sold into the trailer manufacturing, agriculture, metal fabrication, and building products markets.

On August 16, 2024, with cash on hand, we completed the acquisition of certain assets of the FerrouSouth division of Ferragon Corporation (“FerrouSouth”). FerrouSouth is a toll processing operation headquartered in Iuka, Mississippi, which provides flat-roll steel processing, logistics and warehousing services.

Included in our net sales for the year ended December 31, 2024 were combined net sales of $286.2 million from our 2024 acquisitions.

Our 2024 acquisitions have increased our capacity and enhanced our product, customer and geographic diversification. We have not diversified outside our core business of providing metal distribution and processing solutions since our inception.

The preliminary allocations of the purchase prices for our 2024 acquisitions to the fair values of the assets acquired and liabilities assumed were as follows:

	(in millions)
Cash	$	5.6
Accounts receivable		44.9
Inventories		109.9
Prepaid expenses and other current assets		1.0
Property, plant and equipment		107.5
Operating lease right-of-use assets		19.2
Goodwill		56.0
Intangible assets subject to amortization		39.5
Intangible assets not subject to amortization		41.4
Total assets acquired		425.0
Deferred income taxes		6.7
Operating lease liabilities		15.1
Other current and long-term liabilities		32.7
Total liabilities assumed		54.5
Noncontrolling interest		0.3
Net assets acquired	$	370.2

The completion of the purchase price allocations for our 2024 acquisitions are pending the completion of certain purchase price adjustments based on various pre-acquisition period income tax returns.

Summary purchase price allocation information for all acquisitions

All of the acquisitions discussed in this note have been accounted for under the acquisition method of accounting and, accordingly, each purchase price has been allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of each acquisition. The accompanying consolidated statements of income include the revenues and expenses of each acquisition since its respective acquisition date. The consolidated balance sheets reflect the allocations of each acquisition’s purchase price as of December 31, 2024. The measurement periods for purchase price allocations do not exceed 12 months from the acquisition date.

As part of the purchase price allocations for the 2024 acquisitions, we allocated $41.4 million to the trade names acquired. We determined that each of the trade names acquired in connection with these acquisitions had indefinite lives since their economic lives are expected to approximate the life of each company acquired. We recorded other identifiable intangible assets related to customer relationships for the 2024 acquisitions of $39.3 million with weighted average lives of 13.1 years and non-compete agreements of $0.2 million with lives of 5.0 years. The goodwill arising from our 2024 acquisitions predominantly consists of expected strategic benefits, including enhanced financial and operational scale, as well as expansion of acquired product and processing know-how across our enterprise. Goodwill of $31.4 million from our 2024 acquisitions is expected to be deductible for income tax purposes.

Unaudited pro forma financial information for all acquisitions

The unaudited pro forma summary financial results present the consolidated results of operations as if our 2024 acquisitions had occurred as of January 1, 2023, after the effect of certain adjustments, including lease cost fair value adjustments, amortization of inventory step-down to fair value adjustments included in cost of sales, depreciation and amortization of certain identifiable property, plant and equipment and intangible assets.

Pro forma results have been presented for comparative purposes only and are not indicative of what would have occurred had the 2024 acquisitions been made as of January 1, 2023, or of any potential results which may occur in the future.

Pro forma sales were $13,943.5 million for 2024 and pro forma net income and earnings per share were comparable with our 2024 consolidated results.

	Year Ended December 31,
	2023
	(in millions, except per share amounts)
Pro forma:
Net sales	$	15,312.8
Net income attributable to Reliance	$	1,361.7
Earnings per share attributable to Reliance stockholders:
Basic	$	23.35
Diluted	$	23.07