Dec. 28 (Bloomberg) -- Reliance Steel & Aluminum Co. agreed to buy the Encore Group of metals service-center companies to expand sales to energy producers in western Canada.
The price wasn't disclosed. Encore, based in Edmonton, Alberta, had sales of C$254.8 million ($219.7 million) in 2005, Los Angeles-based Reliance said today in a statement. The transaction is scheduled to close in the first quarter, and Encore managers will stay with the company, Reliance said.
Reliance has made more than 35 acquisitions since first selling shares to the public in 1994. Encore makes steel tube for oil and natural-gas drilling companies. Royal Dutch Shell Plc and Western Oil Sands Inc. are boosting exploration spending in Canada as demand increases.
``There are numerous opportunities and companies still out there,'' Reliance spokeswoman Kim Feazle said. ``We will continue to look at acquisitions.''
Shares of Reliance Steel fell 44 cents, or 1.1 percent, to $39.58 in New York Stock Exchange composite trading. They have gained 30 percent this year.
Reliance acquisitions must add to earnings immediately and generate at least a 15 percent return on investment, Feazle said. Reliance processes and distributes more than 90,000 metal products to 95,000 customers in various industries.
Encore was formed in 2004 in a buyout by management and an equity fund managed by HSBC Capital (Canada) Inc., Reliance said. Encore processes and distributes stainless-steel sheet and other metal products through 17 facilities, Reliance said.
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