The U.S. steel industry is one that is consolidating. Esmark Global Specialty Metals, a specialty steel company, is the latest player to join the fray. Esmark, which operates 18 processing plants across the United States, purchased the assets of ECC Lightworkers, a St. Louis-based leader in fiber-reinforced plates. The acquisition of ECC Lightworkers raises Esmark’s capacity and gives it even more scale in processes that include the production of specialty coils and labeled steel. Esmark manufactures and distributes finished, semi-finished and sheet steel products that it sells to a variety of industries, including military, aerospace, construction, petroleum, and mining. The mergers and acquisitions of the past decade have been intense, but when Esmark buys a company, the employees usually stay on. “I’m not a big clientele acquisition guy,” Esmark Chief Executive James Bouchard said. “When we announce an acquisition, we announce it to our employees; we like to keep them on. This is not us taking people off the road, firing them and replacing them.” “You hire the best people you can find,” Craig Bouchard said. Esmark became publicly traded this year, and one of the reasons was to capitalize on the boom in mergers and acquisitions (M&A) that has occurred in the U.S. since 2005.
M&A activity is expected to be steady but not spectacular during a 12-month period that ends around 2025, according to KPMG. A top deal is anticipated within the next 5 years, but projections vary widely by market sector. In New York, M&A has accelerated. It reached $2.5 billion last year and is expected to top $3 billion this year. Craig Bouchard said acquiring businesses to help expand the company’s sales has become standard. “The economy is improving and valuations are improving,” Bouchard said. “To grow sales you have to add customers. How do you add customers if you don’t own them?” The buys will give Esmark a way to provide better equipment and technology, Craig Bouchard said. Esmark is in the process of increasing its telecommunications and research and development capabilities. It is also considering investing in analytics and next-generation computer technology, James Bouchard said. Esmark expects to finalize its first acquisition by November, but the Buys are not expected to be it is last. “In the next three years, we would be in six to eight markets,” James Bouchard said.