Service Centers
March 26, 2019
Strong M&A Activity in the Service Center Sector
Written by Tim Triplett
The metals service center industry will see significant ownership turnover and consolidation over the next 10-20 years, but is likely to remain a highly fragmented, family-owned industry, said Dan Sullivan, president of Montrose Advisors, an M&A advisory firm. Speaking at the S&P Global Platts North America Conference March 15 in Chicago, Sullivan said the robust economy, bullish stock market, favorable interest rates, high corporate profits and a positive view of the future are all contributing to “a strong deal psychology” and lots of M&A activity in the service center sector in North America.
Who is buying service centers? In almost every case, other service centers (with the exception of toll processing businesses), Sullivan said. Recent service center transactions (see chart) show that it’s almost entirely strategic buyers, not financial buyers, who are active in the M&A space.
