| February 2006 |  |
| Service Center News | |
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The
transaction is valued at approximately $934 million, including the
assumption of EMJ’s net debt. The boards of both the Southern
California companies unanimously approved the agreement, which carries
a $20.5 million breakup fee. Upon
completion of the acquisition, Los Angeles-based Reliance will have
total assets of approximately $3 billion and annual revenues of
more than $5 billion. Reliance was ranked No. 2 on the latest Metal
Center News Service Center Top 50, while EMJ was ranked No. 8 among
the industry’s leading service centers. “We
are very excited about EMJ becoming a member of our Reliance family.
This will be our largest acquisition to date and our first acquisition
of a public company,” says David H. Hannah, Reliance CEO. The
transaction will add 39 facilities in the United States and Canada
to Reliance’s existing network, and will significantly increase
the company’s geographic, product and customer diversification.
EMJ specializes in long products, while Reliance is best known for
its flat-rolled steel and aluminum. EMJ’s locations will give
Reliance a stronger foothold in the Midwest and entrance into the
New England and Canadian markets. “The
transaction was not one driven by synergies,” Hannah notes.
“We do expect some synergy in the area of advanced metal sourcing
and on best practices. I’m sure we can both learn certain things
from each other. There’s very little overlap in our businesses.” EMJ,
headquartered in Lynwood, Calif., will continue to operate with
relative independence under the same management structure. EMJ CEO
Maurice “Sandy” Nelson plans to retire once the deal closes.
R. Neil McCaffery has been promoted to EMJ president and chief operating
officer. “EMJ
has an outstanding management group and they will continue to run
the business as they have in the past. We believe that together,
Reliance and EMJ will be well positioned to continue to outperform
our competitors going forward,” adds Hannah, whose company
approached EMJ about the deal in September 2005. “We
believe that joining with Reliance will provide both additional
and more favorable opportunities to create sustainable growth and
value for the shareholders of EMJ and Reliance,” Nelson concludes.
Thyssen
Acquires VPK Metal “As
we continue to grow our operations throughout the NAFTA region,
the acquisition of VPK Metal is an important strategic opportunity
for ThyssenKrupp Materials NA, as it helps us expand our geographic
presence and market penetration in Canada and complements our existing
product line, particularly in the area of red metals and plastics,”
says ThyssenKrupp Materials COO Richard J. Greaves. “We are
looking forward to VPK becoming a member of the ThyssenKrupp family
and to growing our business together.” “The
addition of VPK Metal provides us with enhanced access to a more
diversified customer base and new industry segments in Canada,”
adds Frank G. Kevane, CEO of the Copper and Brass Sales division.
“We are also excited about the new service offerings VPK brings
to our portfolio, such as metal and plastic fabrication and first-stage
machining.” ThyssenKrupp
Materials NA will retain the operational and management personnel
of VPK Metal, including current President Haim Kotler, who will
report to Kevane. “We
believe that the acquisition will significantly improve our growth
potential in North America and will generate new opportunities and
resources that will allow us to offer our customers a superior range
of products and services with the backing of a global industry leader,”
Kotler says. The
acquisition is expected to close in March. VPK
Metal, headquartered near Toronto, is a distributor and processor
of non-ferrous metals with a primary focus on red metal products.
The company sells a complete product line including copper, brass,
bronze, plastics, and aluminum from six service center locations
throughout Canada and the United States. Steel
Warehouse Plans New Line in Southeast The
South Bend, Ind.-based service center company announced in January
its plans to expand in the Southeast at a site along the Tennessee
River in Alabama or Tennessee. When completed, this facility will
be one of the largest temper mills in the United States with the
capacity to handle three-quarter-inch steel in widths up to 96 inches..
“We
have the equipment in place, it’s just a matter of where we’re
going to place it,” says Vice President Rick Quinn. Steel
Warehouse already has operations in Memphis and Chattanooga, Tenn.,
Conway, Ark., and Temple, Texas. It runs cut-to-length, steel processing
and tubing operations at those facilities. The new facility will
be a mirror image of the company’s Memphis operation, Quinn
says. “What’s
driving this is the continued growth and value that temper passing
brings,” he adds. “The growth of lasers in the South has
been more than incremental.” The
new line is expected to be operational by late 2006 or early 2007. Esmark
Buys Premier “The
acquisition of Premier Resources Group greatly expands our ability
to offer customers a just-in-time solution for an array of painted
steel products,” says Esmark CEO and President James P. Bouchard.
“We’re confident this addition to the Esmark family of
companies will accelerate our growth in the painted products segment
of the industry.” Founded
in 2001, Premier Resource Group serves the commercial/residential
construction, garage door, office furniture and appliance industries
with a range of cold-rolled and galvanized painted steel applications
and products. Michael
Noble, president of Premier Resource Group, will remain in that
capacity and also become an officer of Esmark. William Stapleton
and Albert Chiodo will remain executive vice presidents of Premier
and become officers of Esmark. With
the acquisition of Premier Resource Group, annual revenues for the
Esmark Steel Services family of companies now exceed $700 million.
The
TMX Aerospace operation will provide cut-to-size raw material needed
to maintain, repair and overhaul military aircraft. This includes
supporting quick-turn, just-in-time deliveries to manufacturing
points within the Boeing facility utilizing an online order release
system. TMX
Aerospace is a ThyssenKrupp Materials NA company. SMP
Adds Processing Facility in Akron This
additional facility was designed to precision grind, polish and
buff sheet and plate along with offering special custom finishes.
SMP will soon add coil polishing for lighter gauge material. Alpha
Steel in Hammond to Operate as Macsteel The
newly named plant in Hammond, Ind., processes and distributes an
inventory of structural steel beams, shapes, plate, sheet, tubing
and pipe products. “With
the addition of Alpha Steel, we have greatly strengthened Macsteel
Service Center USA’s already solid presence in the Midwest,”
says Michael Hoffman, president and CEO of Macsteel. Macsteel
is one of the nation’s largest service center companies, operating
32 facilities throughout North America. Schaeffer
Industries Plans New Facility in Texas The
facility will mark Schaeffer’s first expansion since 2000.
“We have had our hands full the last few years as we digested
the numerous acquisitions and expansions that were made in the late
1990s, along with streamlining our management team,” says George
Schaeffer, president and CEO. “But now that we are past those
matters, we are back in the hunt.” Schaeffer
Industries operates three steel processing and distribution centers
in Mira Loma and Stockton, Calif., and in Lindon, Utah, under the
name Western Flat Rolled Steel & Processing. Macsteel
Adds Fourth Quench and The
project, similar to its three existing lines, will include a building
expansion and installation of a high-speed, precision cutting line
for product applications. Cost of the expansion, to be completed
in early 2007, is $6.2 million. Upon
completion, the facility will have 16,000 tons of additional bar
and tube capacity, plus an increase in the size range of products,
according to Macsteel officials. Service
center chain Holvoet Plaatbedrijf NV, Kortrijk, Belgium, has selected
Red Bud Industries to install systems at its Gent facility. The
systems include an 8 mm, 2-meter-wide loop-type cut-to-length/blanking
line with stretcher leveler and an 8 mm, 2-meter SCS sheet line.
The blanking line features Red Bud’s in-line stretcher leveler
technology, which delivers a stress-equalized product that stays
flat even during subsequent manufacturing processes such as laser
cutting or punch and notching. Holvoet also will operate an SCS
sheet line, which takes hot-rolled black material through a simple
brushing process and produces a rust-resistant finish without the
use of oils. Heidtman
Steel has ordered five inspection systems from Pasytec AG, a German
supplier of surface and web inspection systems for strip products.
Five of Heidtman’s seven pickle lines will be equipped with
Parsytec surface inspection systems. Banner
Service Corp. has acquired the assets of Northern Cross Steel Co.,
Strongsville, Ohio. Banner is a provider of turned, ground and polished
steel with other locations in Carol Stream, Ill., and Charlotte,
N.C. People Elizabeth
Samuel has retired from her position as chairman of the Samuel,
Son & Co. board. She was replaced by her son Mark Samuel, who
represents the fifth generation of the family to lead the Canadian
service center company. Mark Samuel, who has been with Mississauga,
Ontario-based Samuel since 1982, had been serving as vice-chairman.
Elizabeth Samuel will continue to serve on the board and will assume
the title chairman emeritus. Metal
Supermarkets, Brampton, Ontario, has named Robert M. San Julian
its new president and CEO. Metal Supermarkets is the largest and
fastest-growing distributor of small-quantity metals, with 80 locations
worldwide. The 52-year-old San Julian was formerly CEO of Brafasco,
a fastener and industrial distribution company. Richard
J. Slater joined the board of Reliance Steel & Aluminum Co.,
Los Angeles, Jan. 1. Slater is president of ORBIS LLC, a global
technical services provider. Frances Mazeska has joined Marmon/Keystone’s Bolingbrook, Ill., service center as national product manager-stainless bar. |
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