Majestic Buys Merit to Expand West Coast Presence

Majestic Steel USA has acquired West Coast service center Merit Steel USA in a push to expand its presence in the region.

The Cleveland-based service center said persistent supply chain constraints bolstered the case for growing its footprint west of the Rocky Mountains.

Majestic Steel Terms of the deal were not disclosed.

“Merit has a strong reputation as a West Coast service center. This acquisition enhances our position in the Western region of the country and is a natural extension to our current business model,” Majestic Steel President and CEO Todd Leebow said in a statement.

Merit has locations in Pittsburg, Calif.; Fontana, Calif.; and Longview, Wash. – in other words, close to major West Coast flat-rolled steel suppliers.

USS-UPI LLC, the West Coast subsidiary of U.S. Steel, is based in Pittsburg. Slab converter California Steel Industries (CSI) is based in Fontana. And Longview is approximately 10 miles from the Kalama, Wash., operations of Steelscape – a subsidiary of Australian steelmaker BlueScope that makes metal coated and painted steel coils.

M&A expert Dan Sullivan – founder of Chicago-based Montrose Advisors – noted during an SMU Community Chat last month that private equity was more likely to acquire downstream manufacturing operations whereas service centers were more likely to acquire other service centers.

By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden

Michael Cowden is editor-in-chief for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.