NOTE 5: ACQUISITIONS

On March 14, 2011 ("the acquisition date") Ryerson Inc. acquired all the issued and outstanding capital stock of Singer Steel Company ("Singer"). Singer is a full-service steel value-added processor with state-of-the-art processing equipment. We believe that Singer's capabilities strongly enhance Ryerson's offering in the Midwest and Northeast United States.

The fair value of the consideration totaled $23.6 million on the acquisition date, which consisted of the following:


	Consideration
	(In millions)
Cash	$	20.0
Holdback (1)		3.6

Total	$	23.6

(1)	Any remaining holdback amount not used for undisclosed obligations is payable to the seller within 18 months from the acquisition date.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company used a third-party valuation firm to estimate the fair values of the property, plant and equipment and intangible assets. Inventory was valued by the Company using acquisition date fair values of the metals.


	At March 14, 2011
	(In millions)
Cash	$	0.2
Restricted cash		6.5
Accounts receivable		7.3
Inventory		16.3
Property, plant, and equipment		8.2
Intangible assets		4.3
Other assets		0.3

Total identifiable assets acquired		43.1

Current liabilities		11.4
Deferred tax liabilities		2.3

Total liabilities assumed		13.7

Net identifiable assets acquired		29.4
Bargain purchase		(5.8	)

Net assets acquired	$	23.6

The fair value of accounts receivables acquired is $7.3 million, with a gross amount of $7.8 million. The Company expects $0.5 million to be uncollectible.

Of the $4.3 million of acquired intangible assets, $2.2 million was assigned to customer relationships with a useful life of 7 years, $1.7 million was assigned to trademarks with a useful life of 5 years and $0.4 million was assigned to a license agreement with a useful life of 7 years.

The transaction resulted in a bargain purchase primarily due to the fair value of acquired intangible assets and higher inventory valuation related to rising metals prices. The gain is included in other income and (expense), net in the Statement of Operations. The Company has recognized $0.4 million in acquisition-related fees, which is included in Warehousing, delivery, selling, general and administrative expense in the statement of operations.

Included in the first nine months of 2011 financial results is $26.7 million of revenue and $7.8 million (includes the $5.8 million bargain purchase gain) of net income from Singer since the acquisition date.

The following unaudited pro forma information presents consolidated results of operations for the three and nine months ended September 30, 2011 and 2010 as if the acquisition of Singer on March 14, 2011 had occurred January 1, 2010:


	Pro Forma
	Three Months Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011		2010
	(In millions)
Net sales	$	1,218.8	$	1,044.0		$	3,705.8	$	2,961.0
Net income (loss) attributable to Ryerson Inc.		12.1		(14.7	)		7.6		(35.1	)

The 2011 supplemental pro forma net income was adjusted to exclude the $5.8 million bargain purchase gain realized in 2011 as it is a nonrecurring item.