Gerdau SA and Optimus Steel LLC have entered into a definitive agreement to sell Gerdau’s Beaumont, Texas wire rod mill and two downstream facilities to Optimus for US$ 92.5 million, subject to customary purchase price adjustments. The transaction is subject to regulatory clearances and customary closing conditions, and is anticipated to close before calendar year-end of 2018.

The agreement includes Gerdau’s mill in Beaumont, Texas, and downstream locations Beaumont Wire Products and Carrollton Wire Products. The mill has a melt shop capacity of approximately 700,000 tons, and is capable of producing both wire rod and coiled rebar.

The downstream facilities are Beaumont Wire Products and Carrollton Wire Products. The former includes a wire mesh mill, while the latter supplies industrial wire into the greater US southern region

According to Gustavo Werneck, CEO of Gerdau, “The strategy in North America, a key market for us, is to improve our profitability, focus on more value-added products and better serve our customers, positioning Gerdau as one of the most innovative steel companies worldwide. We remain committed to strengthening our position in the US in the next years and we see a great growth potential in the markets that Gerdau will continue to operate.”

Optimus Steel is a newly formed company affiliated with Jacksonville, Florida-based Wire Mesh Corp (WMC). WMC and Optimus are completely separate, independent entities with different management, though they are also affiliates. WMC will operate the downstream assets, and Optimus Steel will operate the Beaumont rod mill, the statement said. The Beaumont wire mesh mill will enable WMC to offer standard and structural mesh products. Those in turn will complement WMC’s pre-stressed concrete strand operation in Texas.