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06-12-03: Precision Strip purchased by
L.A. company |
By SEAN RICE
The Daily Standard
MINSTER - Precision Strip Inc., a steel and aluminum processing company
based in Minster, has been acquired by Reliance Steel & Aluminum Co., headquartered in
Los Angeles.
Precision Strip was founded in 1977 and has eight locations in Ohio,
Kentucky, Indiana and Alabama, which all are involved in the purchase. Reliance Steel was
founded in 1939 and has 99 facilities in 27 states and three countries.
A letter from Tom Compton, president of Precision Strip, states that it
will be "business as usual" at the Minster plant during and after the
transaction.
"Precision Strip will keep its name and operate as such with
current management in place and upon completion of the purchase will become a subsidiary
of Reliance Steel & Aluminum Co.," Compton wrote.
Precision Strip officials this morning directed questions about the
transaction to Reliance spokeswoman Kim Feazle, who said there are no current plans to
change operations or employees at the Minster plant. She also stressed that the deal still
needs regulatory approval from the Securities and Exchange Commission, which could take 30
days.
Reliance bills itself as one of the largest metals service center
companies in the United States, selling a line of more than 85,000 products in aluminum,
brass, copper, titanium and all types of steel to a customer base of 85,000. The company
had a net income of $30 million in 2002.
On the Reliance Steel Web site, the company said it makes a business of
acquiring smaller metals companies that are performing well, and has purchased 20
companies since they began trading publicly on the stock market in 1994. The company seeks
businesses that are "strategically positioned to diversify or enhance its customer
base, product breadth and geographic coverage," the site says.
"Reliance acquires a lot of companies. We look for companies that
are very well-run and have good management, and Precision of course is in that
category," Feazle said this morning. "We are interested in them of course
because they are a successful company and we feel like we can help them continue to be
very successful."
Reliance's Chief Executive Officer David Hannah said in a release that
Precision Strip would be a good buy, because it is not subject to volatileness of the
metals markets. The company is a toll processor, charging a fee for metal processing but
never taking ownership of its inventory.
Compton said Precision Strip is excited about becoming part of the
Reliance family of businesses.
"We believe that this transaction will enable Precision Strip to
continue to be even more successful for many years to come and allow us to continue to
provide our customers with the quality service and products that you have come to
expect," Compton wrote.
Precision Strip has 762 employees total, with 266 in Minster, Feazle
said. |
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