Insteel buys Strand-Tech, to close South Carolina pressed concrete strand facility

Pittsburgh — US wire drawer Insteel Industries has acquired substantially all of the assets of Strand-Tech Manufacturing for $22.5 million, with plans to shutter the company's Summerville, South Carolina, pressed concrete strand facility later this year, Insteel said Tuesday.

Strand-Tech is a leading manufacturer of prestressed concrete strand (PC strand) for concrete construction applications. In the 12 months that ended February 2, 2020, Strand-Tech's sales were $29.0 million, according to Insteel.

Under the terms of the deal, Insteel acquired, among other assets, Strand-Tech's accounts receivable, inventories, production equipment and facility located in Summerville, South Carolina. Insteel plans to close the Summerville facility and move most of its equipment to its other three PC strand production facilities in Gallatin, Tennessee; Houston; and Sanderson, Florida, it said.

Insteel expects operations at the Summerville facility to cease by the end of the third quarter of fiscal 2020. Up to 42 positions will be eliminated at the Summerville facility. Employees will be offered jobs at Insteel's other facilities with relocation and transition assistance, Insteel said.

"Our decision to close the Summerville facility reflects the harsh market conditions created by the surge in low-priced PC strand import competition following the imposition of the Section 232 tariff on hot-rolled steel wire rod, Insteel's primary raw material," Insteel CEO H.O. Woltz said in a statement. "We are continuing to work with the [Trump] administration to address the unfavorable impact of the increased imports on US manufacturers."

The final purchase price of the deal is subject to an adjustment to be determined based on Strand-Tech's closing working capital balance, Insteel said. The transaction was funded from cash on hand, according to the company.

Insteel is the largest manufacturer of steel wire reinforcing products for concrete construction applications in the US.