Lynch Centers Grow Holdings Of Metals USA
CHICAGO -- Metals USA holdings Corp., Houston, has purchased Lynch Metals Inc., Union, N.J., and Lynch Metals of California Inc., Anaheim, Calif., its second expansion in a little more than a year.
C. Lourenco Goncalves, the service center's chairman, president and chief executive officer, declined to disclose the acquisition cost, but said the combined Lynch companies, which he described as mid-sized service centers, had annual sales in a range of $30 million to $40 million.
Goncalves said the Lynch purchase was similar in size to Port City Metals Services Inc., Tulsa, Okla., which Metals USA bought in May 2006 just after acquiring a metal roofing products manufacturer, Dura-Loc Roofing Systems Ltd., near Toronto (AMM, May 24, 2006).
The two 2006 acquisitions were the only other additions that Metals USA has made since becoming a private company in a buyout by affiliates of Apollo Management LP, New York, in late 2005. They also marked the only additions Metals USA has made since divesting a number of operations during a Chapter 11 bankruptcy reorganization ending in 2003.
"Being private has been great for Metals USA", Goncalves said in a telephone interview. "I think we have been able to become an even better and stronger company during the time that we have been private."
Metals USA continues to look for acquisitions, he said, declining to comment on the status of a reported bid the company had made for Ryerson Inc., Chicago (AMM, April 24). He added that no other acquisition was near to completion.
"We are always looking into things, but our criteria is very difficult to match in terms of the type of products, the type of addition and what kind of integration the company would provide to Metals USA," Goncalves said. "We are very picky in terms of what we buy. But we are always looking."
He described Lynch as a "niche type of business, a very specialized type of nonferrous business," explaining that the company provides brazing and other specialized aluminum processing to aerospace and industrial equipment companies.
"In a nutshell, Port City was high-end carbon plate and Lynch is high-end non-ferrous," Goncalves said. "We're very excited about Lynch, and I think it's a great addition to Metals USA."
The addition of Lynch will strengthen Metals USA's geographic presence in the Eastern and Western United States, executives said in a statement, adding that Metals USA's leading position in the Midwest would support growth opportunities for Lynch's capabilities.
"The acquisition of Lynch is an important strategic move for our flat rolled and nonferrous group as we continue to emphasize an aluminum and stainless steel products mix". Goncalves said, Clint Lynch, president and founder of Lynch Metals, will add his 25 years of industry experience to Metals USA's senior management team, he added.
