Acquisition allows Boomerang Tube to add capacity and product diversity, while merging two high-level customer service cultures.
Chesterfield, Missouri, July 31, 2018 — Boomerang Tube LLC, an Oil Country Tubular Goods (OCTG) producer, has purchased 100 percent of the ownership interests in Southern Tube LLC (STL) from Nippon Steel & Sumikin Oil Field Services Inc. The ownership change is effective immediately, and STL will operate as a wholly owned unit of Boomerang Tube.
After exploring expansion opportunities for the past two years, Boomerang Tube made this strategic acquisition based on the high quality of STL’s equipment, its focus on quality and customer service and its good transportation links – the location is within a mile of Greens Port and has the potential for easy rail access. The acquisition will also enable Boomerang Tube to significantly expand its production capacity and product offering, which will now include seamless tubes and third-party processing of green tube.
“Although a number of facilities have come available over the past few years, until now, Boomerang Tube had not found assets that would help it move forward with its core mission to be the most responsive supplier of OCTG products in the business,” said John Fontana, chairman of Boomerang Tube. “With STL, the combined company is positioned to bring an even greater range of OCTG products to our customers who are seeking our quality domestic-sourced steel tubing.”
The STL acquisition will allow Boomerang Tube to process overflow production from its Liberty plant and increase its capacity to produce finished alloy tubes to almost 400,000 tons per year. Boomerang Tube can also utilize STL’s facility, only 37 miles away from its 487,000-square-foot Liberty site, to handle the limited third-party processing of OCTG performed at its current location. Furthermore, Boomerang Tube also intends to re-establish the rail siding on STL’s site and offer direct rail shipments to customers.
“We think combining STL and Boomerang Tube will be beneficial for all of the customers in the OCTG space,” said Fontana. “We intend to maintain the STL corporate identity for the near term. Contracts with suppliers, customers and service providers – as well as STL employees – are not going to change for now. We know that with both companies’ capabilities, it will be easy to expand our offering and overall market presence.”
The 300,000-square-foot STL site has benefited from significant capital investment over the last few years. The site now boasts a state-of-the-art Danieli soaking furnace, Olympus ultrasonic inspection and advanced threading capabilities. With STL’s culture of quality and leading equipment, Boomerang Tube is confident that it will be able to maintain and improve its established production standards and quality assurance methods.
“Boomerang Tube is proud to have been chosen by Nippon Steel & Sumikin Oil Field Services to take on the ownership and operation of STL, and we look forward to merging these two quality-driven cultures to continue to provide the best service in our industry,” Fontana added. “Overall, the STL team will remain intact, with operations reporting up through Boomerang Tube’s President, Sudhakar Kanthamneni, and with sales reporting to and coordinating with Boomerang Tube’s SVP of sales, Kelly Hanlon and the finance team reporting up to Bob Horsfield, Boomerang Tube CFO.
Throughout the operation of its Liberty, Texas facility, Boomerang Tube has established a superb record of service, quality and supply. The site is currently working four shifts, around the clock, to meet the demand for domestic OCTG.
About Boomerang Tube
Based in Liberty, Texas, Boomerang Tube produces highly engineered oil country tubular goods (OCTG) for consumption in the US and Canadian natural gas and crude oil drilling markets. Owned by Connecticut-based Black Diamond Capital Management, Boomerang Tube manufactures its products using domestic steel, supporting American jobs and maintaining the strictest quality standards in the business. The company’s 119-acre Liberty production facility, northeast of Houston, is strategically located near major steel production centers, end-user markets and the Port of Houston. The 487,000-square-foot facility includes $ 100 million in new state-of-the-art equipment and two ERW mills with 360,000 tons of annual capacity. To learn more about Boomerang Tube, visit boomerangtube.com.
CONTACT: Katie Ray Boomerang Tube, LLC 4804268204 email@example.com
This article has been provided by Nasdaq Globe Newswire.