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 and Southeast United States. The formation of Esmark Steel Group marks a return to the steel services business since Esmark sold its Wheeling-Pittsburgh Steel Corporation subsidiary and network of Midwest service centers to OAO Severstal in July of 2008 for $1.23 billion.
Esmark Steel Group's first acquisition since reentering the steel services industry was University Park, Illinois-based Amtex Steel, Inc., a precision processing and distribution company specializing in flat-rolled and bar products for the light manufacturing and durable goods industries with annual revenue of $50 million. The acquisition was completed in November 2009. The acquisition included Amtex Steel's physical plant assets and real estate, as well as its rail line facilities. The company has since been renamed Chicago Steel & Iron, Inc. and is now a wholly-owned subsidiary of the Esmark Steel Group. The company has expanded the workforce with key additions in the commercial sales and plant staff as part of its growth plan to rapidly increase shipment volume.
In May 2010 Esmark reacquired the assets of Century Steel and Sun Steel in Chicago Heights, Illinois, which it previously owned, and Independent Steel in Cleveland, Ohio from OAO Severstal’s Northern Steel Group. Combined, these companies had annual revenue of more than $300 million and are now wholly-owned subsidiaries of Esmark Steel Group, and join Chicago Steel & Iron 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.
To complement its growing service center network, Esmark Steel Group acquired the assets of Schaumburg, Illinois-based value-added steel distributor Kelco Metals Inc. in October 2010. 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 is a wholly owned subsidiary of Esmark Steel Group and currently maintains offices in Schaumburg, Illinois and Charleston, South Carolina.
The acquisition of Kelco Metals' steel distribution assets not only expands Esmark Steel Group's footprint to the southeastern United States, it will also contribute revenue and customers as Esmark continues towards its 2011 revenue and shipments goals.
Esmark Steel Group intends to replicate its successful business strategy by targeting well-run, family-owned businesses with loyal customer bases and excellent processing facilities and utilize those assets as a foundation for further expansion and growth.
Esmark Steel Group anticipates 2011 revenue of approximately $400 million and will be pursuing additional service center acquisitions on a cash-only basis while carrying no long-term debt on its balance sheet.
Industry veteran Thomas A. Modrowski, Chief Executive Officer of Esmark Steel Group, leads a strong management team and oversees all steel operations. Mr. Modrowski previously managed all of Esmark's $1.3 billion downstream operations, including the $660 million Wheeling-Corrugated subsidiary and its $630 million service center network.
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