Bouchards Reacquire Five Service Centers
Esmark Steel Group, the wholly owned steel services subsidiary of the Bouchard brothers’ Esmark Inc., has reacquired five steel service centers in Illinois and Ohio from OAO Severstal. Terms of the acquisitions were not disclosed. Esmark Inc. is a holding company formed by James Bouchard and his brother Craig following their sale of Wheeling-Pittsburgh Steel Corp. and a network of 10 Midwestern service centers to Russia’s Severstal in July 2008 for $1.23 billion.
Esmark Steel Group bought the assets of Century Steel and Sun Steel in Chicago Heights, Ill., and Independent Steel in Cleveland, Ohio. In addition, the company acquired the intellectual property assets, brand names and trademarks of Chicago-based Great Western Steel and Homewood, Ill.-based North American Steel. Esmark intends to immediately reintroduce the legendary 100-year-old Great Western Steel Company as well as North American Steel as part of its operations and growth strategy.
All of the service centers, which the Bouchards are reacquiring from Severstal, will become wholly owned subsidiaries of Esmark Steel Group, headquartered in Chicago, and will join recently acquired Amtex Steel Inc. (now Chicago Steel & Iron) in the Esmark Steel Group service center portfolio. Esmark intends to capitalize on its flat-roll integration expertise, product synergies and core Midwest customer base to significantly increase flat-rolled shipments moving forward, say company executives.
Century, Sun and Independent Steel are specialists in flat-rolled steel processing, bar products and just-in-time services and serve the automotive, construction, durable goods and light manufacturing industries. The three companies have combined annual steel shipments of approximately 300,000 tons of flat-rolled, value-added products and employ approximately 200 people.
James Bouchard, chairman and chief executive officer of Esmark Inc., says the acquisitions of Century, Sun and Independent Steel greatly expand Esmark Steel Group’s presence in the Midwest market and align with its business strategy of acquiring family-owned businesses in the steel belt with strong customer bases and value-added service offerings.
“We’re extremely pleased to have these companies in the Esmark fold and joining Chicago Steel & Iron in serving our customers in Chicago and across the Midwest. Esmark Steel Group CEO Tom Modrowski and his management team have done a tremendous job in returning Chicago Steel & Iron to profitability and we expect the integration of these companies under the Esmark umbrella will result in similar success.”
Modrowski says the acquisitions are in keeping with its business strategy and will help Esmark achieve its annual revenue goals. “When we acquired Amtex Steel, our growth plans called for reaching the $250 million revenue threshold by the end of 2010. We fully expect to exceed that target by the end of this year. And, we will continue to pursue other attractive service center assets in the Midwest that meet our growth strategy requirements.”
“The economy is facing a long, slow, protracted recovery, so we think there is value to be had right now,” he adds. “Typically the kind of people interested in divesting are small, private, family-owned businesses that want to get off the roller coaster. This last downturn took its toll on a lot of people, who saw their entire net worth flash before their eyes.”