Esmark Acquires St. Louis Company – Deal Marks Third Steel Services Firm Bought by Esmark This Year

March 09, 2005, Crain’s Chicago Business, By Bob Tita

Steel service company Esmark Inc. said Wednesday it has acquired St. Louis-based U.S. Metals & Supply Co. for $16 million.

U.S. Metals has annual sales of more than $40 million. The company operates two cut-to-length processing lines for cold-rolled and coated steel at a 180, 000-square-foot plant.

“U.S. Metals has a solid customer base, diverse product mix and broad geographic coverage that gives us some significant synergies,” said James Bouchard, president of Chicago-based Esmark.

U.S. Metals President Richard Killabrew is expected to remain in charge of the St. Louis plant after the sale is completed.

Steel service centers typically purchase steel from mills, cut or bend it to standardized sizes and then distribute it to manufactures, such auto parts makers or fabricating companies.

U.S. Metals, which processes 60,000 tons of steel a year, is the third service center business bought by Esmark this year.

Primary customers are appliance makers, construction industry and metal shelving manufacturers.

In January, the company acquired TriWestern Metals in Chicago from Pennsylvania-based Triumph Group Inc. for $15 million. Esmark renamed the company Great Western Steel Co. Esmark also bought Chicago Heights-based Century Steel LLC for $30 million in January.

Mr. Bouchard, a former U.S. Steel Corp. executive, and his brother Craig Brouchard, Esmark’s chief financial officer, have been aggressively purchasing service centers over the past year. The company also owns Electro Coating Technologies in East Chicago, Ind., and Sun Steel Co. in Chicago Heights.

The Bouchards have resuscitated the Esmark name with the blessing of Chicago entrepreneur Donald Kelly, who consolidated several well-known brands of consumer products under the Esmark name. Mr. Kelly sold Esmark Inc. to the Beatrice Foods conglomerate during the 1980s.