Oct 19 2010
Esmark Steel Group, the wholly-owned steel services subsidiary of diversified holding company Esmark Inc., today announced that it has acquired the assets of Schaumburg, Illinois-based value-added steel distributor Kelco Metals Inc. for more than $9 million.
With annual revenue of approximately $45 million, Kelco Metals Inc. specializes in hot-rolled, cold-rolled and coated steel products serving OEM manufacturers engaged in the agricultural equipment, office equipment, retail display, tools, shelving and lighting fixture industries. The company, which has been in business for more than 17 years, currently maintains offices in Schaumburg, Illinois and Charleston, South Carolina and employs approximately 15 people.
The acquisition of Kelco Metals’ steel distribution assets will not only expand Esmark Steel Group’s footprint to the southeastern United States, it will also contribute revenue and customers as Esmark continues towards its 2011 revenue goal of $300 million.
James P. Bouchard, Chairman and Chief Executive Officer of Esmark Inc., said the acquisition of Kelco Metals is a strong strategic fit with Esmark Steel Group’s portfolio of service centers in the Midwest and Northeast and bolsters to the company’s rapidly expanding customer base. “Kelco meets our acquisition criteria and opens up new markets for us in the Southeastern U.S. We believe the addition of Kelco’s distribution business will be very complimentary to our growing service center network.”
Earlier this year Esmark Steel Group acquired the assets of Century Steel and Sun Steel in Chicago Heights, Illinois, and Independent Steel in Cleveland, Ohio. All of the service centers are now wholly-owned subsidiaries of Esmark Steel Group, headquartered in Chicago, and will join Chicago Steel & Iron (formerly Amtex Steel Inc.) in the Esmark Steel Group service center portfolio. Esmark intends to capitalize on its flat-roll integration expertise, product synergies and growing customer base in the Midwest and Northeast to significantly increase flat-rolled shipments in 2011.
Thomas Modrowski, Chief Executive Officer of Esmark Steel Group, said Kelco’s customer base and strong distribution network in the Midwest and Southeastern U.S. were key factors in the acquisition. “Kelco has a very diverse customer base across multiple industries and we see significant synergies with our existing operations and customer base as the economy improves in 2011. Kelco also has a strong management and sales team that will help us penetrate the southeastern U.S. marketplace,” he said.
Esmark Steel Group’s operating companies 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. Kelco Metals will add approximately fifty thousand tons of steel shipments annually to the company’s total shipments.
Source: http://www.esmark.com/