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Gibraltar sets its biggest acquisition

Gibraltar Industries has agreed to buy an Alabama-based building products manufacturer in a $240 million deal that will be the biggest in the Hamburg-based steel and metal building products manufacturer's history.

The deal to buy Alabama Metal Industries Corp. will add a company that had $285 million in sales last year and give Gibraltar a leading position in the market for products such as metal bar grating, expanded metal and metal lath.

The acquisition, the 23rd in a little more than 10 years for Gibraltar, will increase the size of the company's building products business by almost 60 percent and push the segment's annual sales above $800 million.

Brian J. Lipke, Gibraltar's chairman and chief executive officer, said Wednesday the deal meets the company's traditional standards for an acquisition. It is expected to broaden the company's product line and expand its customer base, while immediately adding to Gibraltar's profits.

The deal is Gibraltar's first in 13 months, an unusually long period of inactivity for the acquisition-minded company. It also is the first for the company since executives indicated last year that they were interested in making acquisitions that were substantially bigger than the small-to-mid sized purchases that Gibraltar typically has made over the last decade.

"The AMICO acquisition, our largest thus far, illustrates that we are capable of undertaking larger transactions," Lipke said.

The acquisition, which is subject to regulatory approval, is expected to close during the early part of the fourth quarter. It will boost Gibraltar's annual sales to nearly $1.4 billion.

AMICO, which is owned by private equity firm CGW Southeast Partners, will add 19 factories and distribution facilities to Gibraltar's operations, giving the Hamburg-based company 93 facilities in 29 states and three Canadian provinces, as well as Mexico.

The company, which has about 900 employees, has about 7,000 customers in the United States and another 1,000 customers in Canada. The firm will be run as a wholly owned subsidiary of Gibraltar, with the company's current management remaining in charge of day-to-day operations.

The deal also will cement Gibraltar's building products business as the dominant segment in the company's three-pronged business, dwarfing its thermal processing and processed metal products businesses.

In all, Gibraltar's building products business will have nearly 60 plants across North America and relationships with the leading customers in every distribution channel, which company officials have long hoped to use as a way to sell a wider array of products to its existing customer base.

Gibraltar initially expects to finance the acquisition through its existing credit facility and other credit commitments that it has arranged. Eventually, Gibraltar plans to refinance those borrowings by selling debt.


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