Reliance Steel & Aluminum Co., the largest US metals distributor, agreed to buy PNA Group Holding Corp. for about $1.1 billion to add operations in the US and expand in the Mexican market. The seller is Calif.-based private equity firm  Platinum Equity LLC, which it bought in May 2006 for $365 million fromGermany's TUI AG, which had sold off industrial assets as it built up its tour and travel business

Reliance, which has no relation to the Ambani brothers' companies, processes and distributes more than 100,000 metal products, and has made more than 35 acquisitions since selling shares to the public in 1994 to meet rising metals demand. It operates in about 180 locations in the US and about 37 across Belgium, Canada, China, South Korea and the UK.

Los Angeles-based Reliance Steel reported 2007 revenues of $7.3 billion and has a market capitalisation of $5.3 billion. It expects to finance the deal, including PNA's existing debt, through its existing credit facility and by raising about $750 million by issuing new debt and equity securities. The deal is expected to close in 60 days.

 ''The PNA operations complement our existing business and add new products in many geographic areas that further enhance the customer, product and geographic diversification of our business. Through the PNA joint ventures, we also gain entry into a new market for us in Mexico,'' said David H. Hannah, chairman and chief executive officer.

On the financing, Hannah stated, ''We expect that this transaction, including the impact of the expected financing, will be immediately accretive to our earnings, with the dilution from any new shares issued offset by the earnings from PNA and savings from our lower cost of capital. Additionally, we expect our balance sheet and liquidity to remain strong.''

''PNA has been a terrific investment for us from a return standpoint,'' said Jacob Kotzubei, the partner who led the PNA investment. ''It's also proven to be a great example of our approach in identifying companies that need operational support to reach their full potential, and then unlocking value through a combination of both operational initiatives, add-on acquisitions and strong partnership with the management team.''

Following the acquisition of PNA in May 2006, Platinum completed three add-on acquisitions that bolstered and expanded the company's capabilities, acquiring Metals Supply Co., Precision Flamecutting and Steel, and Sugar Steel. Each of those acquisitions complemented operational initiatives underway inside the main PNA platform, Mr. Kotzubei said.

PNA Group and its add-on acquisitions are among several successful industrial and metals services acquisitions Platinum Equity has made over the past three years, including:

In December 2005 the firm acquired ESM Group, which provides a variety of products and services to the steel industry, including desulphurization and secondary metallurgy services, caster segment maintenance, equipment design and manufacture. The seller was Degussa AG, a global specialty chemicals manufacturer based in Germany. After reorganizing the business and establishing it as a strong standalone company, Platinum sold ESM Group to a strategic acquirer, SKW Metallurgie, in October 2007.

In October 2007 the firm acquired Ryerson Inc., one of the largest metals service center providers in North America with revenue of approximately $6 billion. The Ryerson business is currently involved in the normal post-acquisition operational transition into the Platinum Equity portfolio.

Legal advisers to Platinum Equity on the sale of PNA Group to Reliance Steel & Aluminum were James W. Loss and Todd Hentges of Bingham McCutchen. Financial advisers to Platinum Equity were Citi, Goldman Sachs & Co. and UBS Investment Bank.

The transaction is expected to close within the next 60 days, subject to regulatory approvals, Reliance said in a statement. It said the deal should immediately add to earnings. It had annual revenues of $7.26 billion last year.

PNA has 23 steel service centres throughout the US, as well as five joint ventures that operate a total of seven service centres in the US and Mexico. Through its six subsidiaries, PNA Group processes and distributes primarily carbon steel plate, bar, structural and flat-rolled products. Its primary products are carbon steel plate and bar, structural and flat-rolled products, which it sells through operating subsidiaries Delta Steel LP, Feralloy Corp., Infra-Metals Co., Metals Supply, Precision Flamecutting and Sugar Steel Corp.

PNA subsidiaries include Delta Steel LP, Feralloy Corp., Infra-Metals Co., Metals Supply Company Ltd., Precision Flamecutting and Steel LP and Sugar Steel Corp.

The group, which had been acquired by Platinum in May 2006, had 2007 sales of about $1.6 billion.

Reliance rose $3.05, or 4.4 per cent, to $72.73 at 11:43 a.m. in New York Stock Exchange composite trading. A close at that price would be the biggest gain since March 24. The shares climbed 29 per cent this year through yesterday.