Steel Summit: M&A looking good for 2026, panelists say

Pappalardo presented a slide that showed the bulk of M&A in 2024 was in the service center sector. During 2021 and 2022, most M&A occurred in the steel mill and scrap sectors. 

The panel agreed that M&A activity has been stifled since the presidential election because of the uncertainties of tariff and trade-related events.

However, as the industry is seeing a somewhat clearer landscape lately, there has been an increase in activity. The panel agreed that 2026 could be an active year for M&A.

The discussion turned to what each panelist was looking for in an acquisition or merger.

Adams of Worthington said his company looks for companies to which Worthington could add value. They are not looking necessarily for fabricators.

Rather, they prefer companies that would complement their existing customers. They do not want to buy businesses that compete with their current customers.

Worthington believes M&A is a perfect way to enter new markets. Acquiring a company that has a profitable business with an existing customer base is preferrable to a greenfield approach to expand. Asset values, Discounted Cash, and multiples are primary considerations. 

However, they are not interested in “turnaounds,” meaning companies that are underperforming and need to be “turned around.”

Chhibbar of Friedman indicated his firm was seeking businesses experiencing growth and stable returns in the metals market. 

He also looks for asset value, cash flow, and positive forecasts as a requirement for acquisition potential. Friedman also considers how the acquisition fits into their business, preferring a partnership-type approach.

Hauncher of Mill Steel agreed with the other panelists about the importance of these metrics, but also added the target’s customer base is a consideration. 

He said, ”M&A is a tool, not a strategy.”

They also take a long-term view when deciding on a candidate. Therefore, a “turnaround” that could be integrated into their existing business could be considered.