Olympic, Chicago Tube to Merge
Cleveland-based Olympic Steel Inc. and Chicago Tube and Iron Company, Romeoville, Ill., have agreed to merge in a $156 million deal that combines one of the industry’s largest general-line metals distributors with one of the industry’s largest tubular specialists.
Upon completion of the transaction, Donald R. McNeeley, Ph.D. will continue as president and COO of CTI, which becomes a wholly owned subsidiary of Olympic. In addition, Dr. McNeeley will join Olympic’s board of directors and personally acquire an equity stake in the parent company.
“We are thrilled to welcome CTI to the Olympic Steel family,” says Michael D. Siegal, chairman and CEO of Olympic. “Our patience and strong balance sheet have been rewarded with the addition of CTI and its complementary financial strength and values. The acquisition of CTI provides a compelling value for our combined customers, suppliers, employees and shareholders. We are excited to enhance our commercial opportunities as we add the combined companies’ product offerings to our expanded customer base.
“Critical to our purchase decision was that CTI’s senior management will stay with the ongoing operation,” Siegal added. “We also want to express our thanks and gratitude to Bob Haigh, CTI’s chairman and CEO, who will be retiring in November 2011, after more than 40 years of successful leadership of CTI and the steel service center industry.”
Both companies acknowledge the industry trend of customers seeking purchasing efficiencies through one-stop shopping. “CTI’s and Olympic’s products and services offer an ideal complement. While there is no product or value-added overlap, there is a beneficial overlap of key customers. It is imperative that we remain relevant to what has been a loyal customer base,” McNeeley says.
Olympic Steel was ranked No. 21 in the 2010 Metal Center News ranking of the industry’s Top 50 service center companies, while CTI was ranked 35th. The combined companies will have approximately $1.5 billion in sales, 1,600 employees, four million square feet of facilities, and 30 locations throughout the United States and Mexico.