Steel Pipe Giant Zekelman Files for U.S. IPO

(Bloomberg) -- Steel pipe and tube manufacturing giant Zekelman Industries Inc. filed for an initial public offering in what could be one of the highest-profile industrial listings in the U.S. this year.

The company listed an offering size of $100 million in its filing Friday with the U.S. Securities and Exchange Commission. The initial number is typically a placeholder amount that later changes.

Including debt, Chicago-based Zekelman is aiming for a valuation of about $5 billion, people familiar with the matter said in July. The company is aiming to list as soon as this year, the people said.

The company, which traces its roots to 1877, has been owned by the Zekelman family since 2011, according to its website. Barry Zekelman is chairman and chief executive officer of the company. Entities controlled by members of the family will continue to own a controlling interest after the IPO, according to the filing.

Zekelman makes pipes and tubing for bridges, railways, auto parts manufacturers, energy systems and construction framework.

Stronger Demand

The company has benefited from stronger demand for its products as well as wider spreads between what it pays for steel and how much it charges customers, according to a report in May from Moody’s Investors Service Inc. Cost cutting and acquisitions have also strengthened its financial performance, Moody’s said.

The company bought American Tube Manufacturing Inc. and Western Tube & Conduit Corp. last year.

Zekelman posted net income of $161 million on net sales of $2.1 billion for the year ended Sept. 30, according to the filing. That compares with $68 million on sales of $1.6 billion a year earlier.

Its IPO plans come during an uptick in U.S. listings of industrial companies, which includes building materials. Last year saw a decade-high $4.9 billion raised in new share sales, the most since the year before the housing crisis took hold, according to data compiled by Bloomberg.

The largest industrial sector IPO in the U.S. this year was ADT Inc.’s $1.47 billion listing in January, followed by Gardner Denver Holdings Inc. at $947 million in April. ADT’s current market value is $6.6 billion while Gardner Denver’s is $5.56 billion.

Zekelman describes itself on its website as North America’s largest independent maker of steel pipe and so-called hollow structural sections, or metal tubes used in building beams and columns, among other things. Most of its products are used in infrastructure and non-residential construction, the company said in its filing.

Goldman Sachs Group Inc. and Bank of America Corp. are leading the offering. The company plans to list its shares on the New York Stock Exchange and Toronto Stock Exchange under the symbol ZEK.

--With assistance from Kiel Porter.

To contact the reporter on this story: Alex Barinka in San Francisco at abarinka2@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Matthew Monks

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