Creating New Steel Business Opportunities with a “Magic” Touch

SteelSummit Holdings (SSH) recently acquired Magic Steel Sales, a mid-size steel service center, in a move designed to expand SSH’s product lines, seeing future auto production shifts toward the southern United States, as well as exploring new steel product markets that were well-supplied by Magic Steel.

Noble-Summit

Noble-Summit

Noble-Summit

Noble-Summit

Noble-Summit

Founded in 1987 in Nashville, Tennessee, SSH operates metals service centers in Nashville and Cincinnati, Ohio, with more than $500 million in sales and nearly 600 thousand tons of steel product output per year.

By comparison, Magic Steel experiences 190 million in sales and 228 thousand tons of product annually. Headquartered in Grand Rapids, Michigan and founded in 1974 by Joe Maggini (the company’s namesake), Magic Steel operates steel service centers in both Grand Rapids and Decatur, Alabama. The acquisition of Magic Steel allows SSH to cover the western half of the demand area for automotive and other steel consuming industries, these being across western Michigan, Ohio, Indiana, Tennessee, Alabama and part of Mississippi.

“We have customers who have multiple locations across this demand area,” stated Takayuki Nagashima, EVP of SteelSummit Holdings, Inc. “With wider coverage of this geographic area, we will be able to target these and new customers more easily. Also, as our purchase quantity goes up with this acquisition, our steel bargaining power will increase.”

Magic Steel’s Michigan plant has a dominant presence in supplying steel to the office furniture manufacturing industry, with more than half of that production occurring in western Michigan. Customers include furniture manufacturers such as SteelCase, Haworth, Herman Miller, Knoll and others with whom Magic Steel has been cultivating excellent relationships over the years.

“The office furniture industry has a sizable and stable demand for steel,” Nagashima stated. “Before this ac

quisition, SteelSummit Holdings did not have a foothold in this industry. By having a portfolio in the other sectors of steel that connect to businesses other than automotive, we can stabilize the demand fluctuations among such industries.”

Nagashima also stated that the U.S. automotive steel supply chain has charted a direction facing south, so SteelSummit looks to take advantage of this trend and expand its presence.

“As the automotive production as well as steel sheet production moves south in the U.S., it is imperative for us to have processing facilities in the southern states. For the past few years, we have been actively searching for mergers and acquisitions and also greenfield opportunities to set up these production locations in the south.”

“We are very excited to welcome the Magic Steel employees to the SteelSummit family,” said SSH’s CEO Todd Rollins. “This acquisition is a perfect complement to our organization as it adds new markets and geographic diversity with minimal customer overlap. It will provide SteelSummit an excellent platform for future strategic growth. We are very pleased that Joe and the Magic Steel leadership team have entrusted SteelSummit to build on the great success and values of the Company he founded in 1974.”

Joe Maggini, Founder and CEO of Magic Steel, echoed Rollins’ sentiment, “Our strategic decision to hand over the reigns of Magic Steel after 45 years will provide our company a great foundation for future success.”

“We have customers who have multiple locations across this demand area. With wider coverage of this geographic area, we will be able to target these and new customers more easily. Also, as our purchase quantity goes up with this acquisition, our steel bargaining power will increase.”
– Takayuki Nagashima,  EVP of SteelSummit Holdings, Inc.

CAPTIONS:

Above: left to right from front: Yoshihiro Furukawa, AGM SCOA Steel & Non Ferrous Metal Group; Takayuki Nagashima, EVP Steel Summit Holdings, Inc., Todd Rollins, CEO & President, SteelSummit Holdings, Inc.; and members of the Magic Steel-Decatur, Alabama family”

Above: Stu Hunt, VP of Purchasing, Steel Summit Holding, Inc. & Magic Steel; Todd Rollins, President & CEO, SteelSummit Holdings, Inc.; and Takayuki Nagashima, EVP, SteelSummit Holdings, Inc.

Above: Brendan Kelly, Corporate VP of Sales, Magic Steel; Todd Rollins, President & CEO, SteelSummit Holdings, Inc.; and Randall Cross, VP of Sales – Decatur, AL, Magic Steel