Service Center News

Kloeckner Acquires National Material de Mexico

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Klöckner & Co. has agreed to acquire National Material of Mexico, a leading independent service center and materials supplier serving automotive and industrial end markets in North America with 10 facilities throughout Mexico. The transaction is made through the company’s U.S. subsidiary, Kloeckner Metals Corporation.

The acquisition will significantly expand KMC’s footprint in Mexico, enabling the company to increase its presence where the key automotive and industrial customers are located. The parties have agreed on a consideration of $340 million on a cash and debt-free basis.

“National Material of Mexico is an excellent strategic fit and the ideal partner for the future progress of Kloeckner Metals Corporation. Our customers will benefit from this transaction sustainably – for example, through better access to electrical steel to support the growing investment into renewable energy and the rising demand for e-mobility in North America,” said John Ganem, CEO of Kloeckner Metals Corporation. “We are excited to be working with NMM to bring our product and service offering to the next level.”

Established in 1999, NMM is a leading independent service center and supplier of carbon and electrical steel, aluminum and stainless steel, serving automotive and industrial end markets in North America. Headquartered in Monterrey, NMM operates 10 facilities throughout Mexico. The company offers processing capabilities that include slitting, cut-to-length, leveling, multi-blanking, configured blanking and core processing. Upon closing of the transaction, NMM will be positioned under the Kloeckner Metals brand.

“The acquisition of National Material of Mexico is of major strategic importance for us, demonstrating our focus on sustainable growth. It will strengthen our position as a leading distributor for steel and metal products and as a steel service company in North America," said Guido Kerkhoff, CEO of Klöckner & Co. SE.

NMM fits into KMC’s strategy and will provide the company with a growth platform in the market. The high complementarity of regional presence, customer segments and NMM’s significant footprint within the automotive sector make the transaction a natural step for both parties, the company claims. In general, Mexico is a very attractive location for KMC, given its proximity to the USA and its well-qualified labor market. All major global automotive companies are producing in the country and the number of vehicles manufactured there is expected to grow significantly going forward.

At the same time, automotive companies are rebuilding their inventories to meet pent-up consumer demand and the cyclical replacement of fleets over the coming years. These positive prospects are underpinned by the strong growth in demand for electric vehicles as a future-proof niche within the automotive segment.

KMC intends to build on these strengths in order to expand its market presence, broaden its product offering and further develop existing relationships through cross-selling. This acquisition provides a highly attractive entry point for KMC into the exclusive electrical steel market by acquiring a business with scale, management expertise and value-added capabilities.”

The experienced management team of Carl Grobien, president of National Material of Mexico, and Steve Badyna, vice president National Material Electrical, will be staying on board and will continue to drive the future growth of the combined company.