Shale-Inland, the steel distributor founded by Craig Bouchard, agreed to buy a unit of HD Supply Inc. in a deal in which the combined company will be controlled by buyout firm TowerBrook Capital Partners LP.
The Stephens Group LLC will also be an investor in Shale Inland Holdings LLC, the new company formed as a result of the transaction, Schiller Park, Illinois-based Shale-Inland said today in a statement.
Bouchard plans to pay about $500 million for HD’s Industrial PVF unit, people with knowledge of the matter said yesterday. Industrial PVF sells industrial pipe, valves, and fittings for use in oil refineries and power plants, with revenue of $569 million in the year ended Jan. 30, 2011. Shale- Inland’s products include bumpers for Ford Motor Co. vehicles and lids for cooking pans.
Before establishing Shale-Inland, Bouchard, 58, and his brother James, the sons of workers at Inland Steel Co., founded Esmark Inc. in 2003. They built the company via acquisitions, including the hostile takeover of Wheeling-Pittsburgh Steel Corp., into the fifth-biggest U.S. steelmaker. OAO Severstal, Russia’s largest steel producer, bought Esmark for $775 million in 2008.
James Bouchard runs a closely held company under the Esmark name that includes steel, oil and gas production and other divisions.
HD Supply, based in Atlanta, is the former wholesale distribution arm of Home Depot Inc. Private-equity firms Bain Capital LLC, Carlyle Group LP and Clayton Dubilier & Rice LLC, bought the company for $8.5 billion in 2007.
TowerBrook is the New York-based former buyout arm of billionaire George Soros’s hedge fund firm. Spun off in 2005, the firm and manages about $4.5 billion now, according to its website.
Deutsche Bank AG is advising HD Supply on the planned sale, said the people with knowledge of the matter who spoke on condition of anonymity as the deal hadn’t been disclosed at the time. General Electric Co.’s (GE) GE Capital unit is providing financing to the buyers.
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