JSW Steel acquires three US firms from Jindal Saw

JSW Steel acquires three US firms from Jindal SawThe country's third-largest private steel company JSW Steel has announced the acquisition of three separate business entities, including steel plate and pipe mills, in US for an enterprise value of $900 million. The three units were owned by Jindal SAW, the Delhi-based pipe major headed by PR Jindal, elder brother of Sajjan Jindal. Both JSW Steel and Jindal SAW are a part of the $6-billion OP Jindal Group. The acquisition price works out to 6.25 times of EBIDTA and is comparable with the other transactions in the US pipe industry, where they ranged from 4.7 to 14.8 times of EBIDTA. The three US entities reported a loss of $42 million, over revenues of $510 million last year.In a transaction that will be completed within 45 days, JSW Steel will pay $810 million to acquire 90% of the Delhi-based company's stakes in three entities — Jindal United Steel Corporation, which produces plates; Saw Pipes USA, which manufactures pipes; and Jindal Enterprises LLC, which has a coating line.With the acquisition, JSW Steel will have control over the largest pipe-making facility in the US. The acquisition will mark its entry point into the growing oil and gas sector in North America, which is driving the plate and pipe demand. On the other hand Jindal SAW will be able to focus more on its pipe manufacturing business as its core business.