Moving Metal

and were determined to emulate it. Metals USA was partic- ularly impressed by Reliance’s breadth of products and its record of good, solid acquisitions. “We attempted to close the gap through value-added processing,” McPherson later acknowledged, but in the end, his team realized that “it was too late in the game to really catch upwith Reliance.” The team was nevertheless successful in making the individual service centers reputable in their local markets, enabling Metals USA to generate strong and consistent financial returns. Reliance management had no doubts about the potential for further improvement of Metals USA as part of the Reliance family of companies. The acquisition, for $786 million cash and assumption of $454 million in debt, was completed on April 13, 2013. Having helped keep Metals USA “culturally accustomed to change and trying different approaches to improve itself” during the years of transition, McPherson was elevated to CEO of the new wholly-owned subsidiary. An important advantage, he noted, was the similarity between the company cultures at Reliance and Metals USA, “which has meant that the post-ac- quisition transition hasn’t brought on too much of a dramatic change.” Dave Hannah agreed. “The integration of Metals USA into the Reliance family continues to progress nicely,” he told industry analysts in November, 2013. “We’d say there are just lots of good things happening.” Reliance’s next acquisition was small in comparison, but promised good things no less. Haskins Steel was founded in Spokane, Washington, in 1955 to distribute carbon steel and aluminum to a highly diverse customer base in eastern Washington, northern Idaho, western Montana, and northeast Oregon. In 2012, Haskins had about 100 employees and sold about $31.5 million in metal products. On November 1, 2013, Reliance’s wholly-owned subsidiary, American Metals Corpo-

Flame cutting at the Muskogee, Oklahoma, warehouse, one of 48 service centers acquired in the April 2013 purchase of Metals USA.

of Reliance’s historical legacy, its bedrock principles, and the best possible indicator of the company’s direction in the coming years. Underscoring that declaration was another bombshell: On February 6, 2013, Reliance announced an upcoming $1.25 billion acquisition, the largest in its history. Metals USA Holdings Corporation, based in Fort Lauderdale, was a con- solidation of forty-eight metals service centers assembled by private equity firm Apollo Global Management LLC. Metals USA was initially formed as a roll-up, acquiring several private metals service center companies with their stock and merging them into a centralized company run by people from outside of the metals service center industry. This strategy did not work well and ended with a bankruptcy in 2002. Apollo purchased Metals USA out of bankruptcy and brought in a number of new managers. One of the few who made the transition, however, was Robert McPherson, an industry veteran and now Metals USA Chief Financial Officer. He and his colleagues considered Reliance the “best in class” metals service center company

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