Esmark Steel Group Completes Third Steel Acquisition In Past Year;
Addition of Kelco Strengthens U.S. Market Share And Contributes $45 Million in Revenue Toward ESGâ€™s 2011 Revenue Goal of $300 Million
CHICAGO, IL, October 18, 2010 â€“ 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 Metalsâ€™ steel distribution assets will not only expand Esmark Steel Groupâ€™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 Groupâ€™s portfolio of service centers in the Midwest and Northeast and bolsters to the companyâ€™s rapidly expanding customer base. â€śKelco meets our acquisition criteria and opens up new markets for us in the Southeastern U.S. We believe the addition of Kelcoâ€™s distribution business will be very complimentary to our growing service center network.â€ť
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 Kelcoâ€™s customer base and strong distribution network in the Midwest and Southeastern U.S. were key factors in the acquisition. â€śKelco 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,â€ť he said.
Esmark Steel Groupâ€™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 companyâ€™s total shipments.
About Esmark Steel Group
Esmark Steel Group, a wholly-owned subsidiary of Esmark Inc., was formed in November 2009 to identify and pursue strategic acquisitions in the steel service center sector in the Midwest. The formation marked a return by Messrs. Bouchard and Modrowski and Esmarkâ€™s management team to the steel industry since they led the sale of Esmark Incorporated (a former publicly traded company on NASDAQ), its Wheeling, West Virginia steel mill and network of ten Midwest service centers to OAO Severstal in July of 2008 for $1.23 billion. In addition to Esmark Steel Groupâ€™s $10 million acquisition of Amtex Steel in November 2009, Esmark Inc. also acquired Meadville, Pennsylvania-based Excalibur Machine Company, Inc. for $3.5 million in cash. Excalibur Machine is a precision machining and steel fabrication firm that supplies parts, sub-assemblies and materials handling equipment to Original Equipment Manufacturers (OEMs) engaged in the transportation, materials handling, heavy construction and power generation industries. Excalibur is now part of Esmark Inc.â€™s Industrial Group subsidiary.
About Esmark Inc.
Esmark Inc. is a privately owned holding company created to house the investment and philanthropic activities of James P. Bouchard, who is founder, Chairman and Chief Executive Officer of Esmark Inc. Esmark’s roots run deep in the steel industry, but over the years the company has diversified its interests into a number of ventures in and around the industrial and commodity markets. Esmark has focused on several key industries including oil and gas exploration, aviation services, real estate and technology. Esmark Energy is focused on exploring and producing more domestic oil to reduce Americaâ€™s dependence on foreign oil. And, Esmark Aviation has an exclusive contract with the famed Cleveland Clinic to provide contract medical flight services to the institution. More information about Esmark can be found at www.esmark.com.