The acquisition expands Commercial Metals Co.'s (CMC's) footprint in the U.S. rebar market. However, in our view this benefit is partially offset because the acquisition also increases the company's exposure to construction end markets, which are vulnerable to competition from cheap imports and subject to volatile prices. Over the medium term, we expect these assets to contribute about 25% of EBITDA. After rising to 3.8x at the end of the first fiscal quarter 2019 (Nov. 30, 2018), we expect debt to EBITDA to drop below 3x by the end of fiscal 2019 as earnings from the new assets partially offset debt from the acquisition. Incremental volumes from the new Durant, Okla. micro mill as it ramps up to full capacity
