CHICAGO Samuel, Son & Co. Ltd. has acquired plate processor Frontier Steel Co.
John Matig, president of Neville Island, Pa.-based Frontier, said that he sold the company in order to expand the operation and secure his employees long-term future.
"The reality is that (selling to Samuel) will provide security and more opportunity," Matig told AMM Thursday. "Long-term, its better for our employees. Samuel started in 1855, and we want to be here for 100 years. This ensures our people are taken care of while maintaining our autonomy."
Matig, who will stay on to manage the operation, said he was very choosy about who would acquire Frontier Steel. "We had people kicking our tires for years," he said. "I had no interest in Wall Street groups (private equity firms). There had to be synergy. We specialize in plate, and (Samuel) offers stainless, flat-rolled and aluminum. ... Most of our customers buy those other commodities."
With Samuels broader product range, Frontier Steel can "better service them and grow our business at a more rapid pace," he said. "We went from the Flintstones to the Jetsons" in terms of overall capabilities.
Frontier Steel has more than a dozen customers who also serve as sort of subcontractors, processing plate products for other customers. With Samuels resources, Frontier will be able to consider securing a larger space and add more equipment to perform all those services in-house, which "will keep our folks busy," Matig said.
Until now, the effort to raise capital toward growth and weigh the purchase of inventory and equipment was "agonizing," Matig said.
One benefit of the buyout is that younger employees will have a chance to move up the career ladder with a much larger company rather than having to wait until someone at Frontier retires for a position to open up, Matig said.
Established in 1999, Frontier Steel sells processed plate products into the general manufacturing, transportation and energy sectors. Those markets are busy, and "the good news is there are positive indicators in construction," said Matig, who estimates 2012 revenues were above $70 million, up about 18 percent from 2011.
A spokesman for Samuel, Son could not be reached for comment Thursday. The Mississauga, Ontario-based service center chain has more than 100 facilities in Australia, Britain, Canada, China, Mexico and the United States.
The terms of the sale were not disclosed.