Moving Metal

skeptical of Reliance’s promises not to change the Yarde culture. “It took a while for them to see that we would stand true to that,” observed Smith, some years later. “Culturally, at the operating level, we are very similar to what we were before the acquisition,” he concluded. “There’s a family-ori- ented feel.” All of these big acquisitions propelled Reliance onto an even higher plane financially and allowed the company to reshape and broaden its options for funding future acquisi- tions and operations. In November 2006, Reliance replaced its $600 million credit line with a $1.1 billion five-year, unse- cured syndicated line that offered more cash at more favorable pricing than before. The new credit line could be increased to $1.6 billion with lender approval. Following a series of complex financial moves to take advantage of its expanded credit, Reliance paid down some of its debt and issued investment grade debt instruments, including $350 million in ten-year notes and $250 million in thirty-year notes. These investment grade notes, rated Baa3 by Moody’s and BBB- by Standard & Poor’s, raised Reliance to a new level in the capital markets and lowered the cost of capital signifi- cantly, providing Reliance with the financial muscle required to keep swinging in the big leagues. Reliance flexed this muscle in early 2007 with the January acquisition of Crest Steel Corporation, headquartered in Carson, California. Founded in 1963, Crest specialized in carbon steel products, with net sales in 2006 of $133 million. Also in January, Reliance subsidiary Siskin Steel & Supply Company acquired both Industrial Metals and Surplus, Inc., based in Atlanta, and a related company, Athens Steel, Incor- porated, located in Athens, Georgia, which was merged with Industrial Metals and Surplus after the acquisition. Indus-

Sawing aluminum plate at Siskin Steel & Supply. In 2007, Siskin acquired Industrial Metals Supply and its satellite operation, Athens Steel.

because Bruce Yarde was intent on exiting soon. “Is there anyone out there we could sell the business to in order to keep it running?” asked Craig Yarde. He already had an answer, having known Gregg Mollins since both served on the Board of Directors of the National Association of Aluminum Dealers. The discussions progressed quickly on the basis of the already-established relationships and the acquisition was completed in August 2006. In keeping with standard Reliance practice, Yarde’s management and employees remained in place, with Tracy Yarde-Smith—who had succeeded her father as soon as he began planning retirement—serving as President until her Chief Operating Officer (and husband) Matthew Smith took over in November 2008. Some longtime employees were

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