Moving Metal

his most valuable lesson about Reliance. “It’s a relationship company,” he said. “People buy from people they like.” In the mid-1980s MacBeth became Manager of the flagship plant in Vernon. During the mid-1990s, he ran the Feralloy joint venture for a time. In 1998, as Gregg Mollins was putting his team together, he tapped MacBeth to become Vice Presi- dent, Carbon Steel Operations. Another purchase, which paid great dividends in the long run, was the acquisition of the Atlanta-based Phoenix Metals Company. The company had been founded in 1979 by metals service center industry veterans Steve Almond and Wayne Grant. During the next two decades, Almond and Grant expanded their business by developing relations with industry colleagues, moving into Birmingham, Alabama; Charlotte, North Carolina; Tampa, Florida; and Nashville, Ten- nessee. Phoenix Metals specialized in flat-rolled aluminum, stainless steel, and coated steel and was exceptionally good at handling its exclusively small order “transactional” business. By the late 1990s, however, Phoenix required new capital to continue to grow, and that was where Reliance came in. Reliance management was impressed by the record Phoenix had established for successful expansion into brand- new “greenfield” locations. “You’re starting with nothing,” noted Almond. “You’ve got to plant a seed and watch it grow,” he continued, “and that was what we did best.” Reliance made Phoenix an offer. “It looked like a lot of money to us and we could continue to work,” said Grant, and Phoenix accepted the offer. Grant and Almond were not dis- appointed. One of the first things Reliance did was convince Phoenix to recognize its own value. “You guys are better than you think you are and you’re worth more money,” Hannah and Mollins insisted. “The one thing Reliance gave us was this,”

tise along the way. At the core of this portfolio was service to the aerospace sector. That industry had been cyclical, but usually profitable, for Reliance ever since the company had entered the market in 1948. “We’ve got some of the very best companies,” Sales observed. “AMI clearly is the leader on the aluminum side. Bralco also does very, very well. And we’ve got Service Steel Aerospace doing aerospace steel, titanium…they do a wonderful job.” In November 1997, again with the assistance of Don- aldson, Lufkin and Jenrette and Arter & Hadden, Reliance refilled its coffers with a $94 million secondary public stock offering and prepared for new growth. Although company officers were meticulous in arranging these transactions, the secondary offering was almost delayed by one overlooked detail. Bob Henigson’s notarized signature was missing from one document—and he was on vacation in Morocco. Arter & Hadden’s Kay Rustand tracked him down. “There were no notaries available on a Sunday there,” she recalled, “so DLJ’s counsel sent a lawyer to meet Bob and his wife in London to get the signature.” The company began the next year with revenues in excess of $1 billion, a cash balance of $34 million, and forty-four metals service centers nationwide. In January 1998 came two more acquisitions. Reliance marked its entry into themid-Atlanticmarket with the purchase of Durrett Sheppard Steel Co., Inc. Located in Baltimore, Maryland, Durrett Sheppard specialized in processing and dis- tributing carbon steel plate, structural steel, and bar products. These acquisitions, like the rest of the carbon steel portfolio, came under the watchful eye of Jim MacBeth. A native of Southern California, MacBeth was a career man at Reliance, having joined right out of college in 1969. In working his way up through the sales department, MacBeth learned perhaps

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