Moving Metal

Reliance’s strategy—it was a high-margin business serving agriculture, office equipment, electronics, appliance, auto- mobile, and architectural industries. Following the October 1 acquisition, the renamed Diamond Manufacturing Company became a subsidiary of Reliance. Just two months later, on December 1, Reliance made a well-considered return to carbon steel, acquiring the Portland, Oregon-based Lampros Steel, Inc. Reliance also took a related interest in Lampros Steel Plate Distribution LLC, which owned a fifty percent interest in a partnership called LSI Plate, a carbon steel plate distributor established in 1999 with locations in California and Oregon. Lampros Steel itself was founded in 1983 by father-and-son duo Milt and Marcus Lampros. Careful due diligence revealed that in addition to strengthening Reli- ance’s presence in the Pacific Northwest, Lampros, with an outstanding reputation for customer service, would also be a good cultural fit. After the acquisition, Lampros operated as as part of American Metals Corporation, a Reliance subsidiary. Reliance closed out 2010 with net income up thirty-one percent to $194 million on sales of $6.3 billion. As the global economy continued its slow recovery in 2011, Reliance invested in the future, sinking $156 million into capital expenditures—the highest amount ever in company history. Reliance made one acquisition during the year in the highly strategic energy sector. Continued instability in the Middle East had spurred foreign and domestic oil exploration, so in August 2011 Reliance seized an opportunity to acquire Houston-based Continental Alloys & Services, Inc. and its subsidiaries. Continental, founded in 1976, was a leading global materials management company dealing in high-end steel and alloy pipe, tube and bar products, and precision tools designed for oil well completion projects. It operated

Precision slitting at McKey Perforating Company, a 145-year-old company acquired by Reliance subsidiary Diamond Manufacturing in February 2012.

became hesitant to consider new acquisitions in that sector, particularly if there was any question about reputation, man- agement, or customer service. In addition, the near disaster of 2009 had left the company shaken, and management continued to operate under the assumption that economic collapse could happen again. “The experience of 2009 has taught us that we need to be careful so as not to become focused on moving the needle,” observed Tom Gimbel. “That does not mean that we will not grab a whale if it is the right one. But we will look twice before throwing the harpoon.” Coming out of the Great Recession, acquisition oppor- tunities in the market were generally small specialty metals companies that were serving strong end markets such as energy, or were offering higher value-added processing. In the fall of 2010, Reliance purchased Diamond Consolidated Industries, Inc. It was an old company, founded in 1915 and headquartered near Philadelphia. Diamond Consolidated had subsidiaries in Wyoming, Pennsylvania; Michigan City, Indiana; and Charlotte, North Carolina, and specialized in precision-engineered perforated metals and custom punches for tools and dies. Diamond’s offerings dovetailed well with

162