A major metals service company is leaning into its name and expanding its capabilities in coated carbon and stainless steel, acquiring a Midwest manufacturing firm.
Cleveland-based Olympic Steel announced a $131 million acquisition. of Wichita-based Metal-Fab. Metal-Fab will continue to operate under its same leadership, but will be referred to as an Olympic Steel company. The acquisition is expected to take immediate effect.
The acquisition is the second-largest in the history of Olympic Steel, which dates back to 1954. It also marks the sixth acquisition for the company in five years as it looks to compete at a national level. The company, which has more than 40 locations, conducts direct sales of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin plate and metal-intensive products.
Metal-Fab opened for business in 1958, primarily manufacturing venting and filtration products for residential, commercial and industrial use. Its products, primarily constructed of coated carbon and stainless steel, are made in two warehousing and fabrication facilities in Kansas.
“Metal-Fab’s consistent earnings model has proven recession-resistant and is a perfect strategic fit for Olympic Steel,” Olympic Steel CEO Richard Marabito said in a statement. “Metal-Fab’s manufacturing expertise and catalog of products are an excellent complement to our growing portfolio of metal-intensive end-use products.”
In addition to the acquisition, Olympic Steel also increased the size of its asset-based revolving credit facility, expanding it from $475 million to $625 million. The total debt following the acquisition is $297 million.
In the third quarter, Olympic Steel posted a net income of $12 million, compared to a $44.5 million income during the same quarter the previous year. The company recorded $634 million in sales during the third quarter, also below the $668 million in sales conducted in 2021’s third quarter.
The company’s focus is in the Midwest, but it also has some locations on the East Coast, including one in Milford, Connecticut.
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