Chicago, Illinois-based Esmark Steel Group, the wholly-owned steel services subsidiary of diversified holding company Esmark Inc., announced Monday 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 Metals' steel distribution assets will not only expand Esmark Steel Group'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., commented on the acquisition, noting that "Kelco meets our acquisition criteria and opens up new markets for us in the Southeastern United States. We believe the addition of Kelco's distribution business will be very complimentary to our growing service center network."
Thomas Modrowski, Chief Executive Officer of Esmark Steel Group, said Kelco's customer base and strong distribution network in the Midwest and Southeastern US were key factors in the acquisition. "Kelco 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 US marketplace," he said.