Kenwood Painted Metals & Flack Global Metals Merge
On Monday, Flack Global Metals announced the merger of Kenwood Painted Metals with Flack Global Metals. With the addition of KPM, Flack Global Metals is projecting sales for 2017 to be close to $400 million.
Steel Market Update spoke with Flack Global Metals CEO, Jeremy Flack about their company’s drive to grow as a “Next Generation” or non-traditional service center and reach the $1 billion revenue target he has set for the company. Flack does not meet the traditional “brick & mortar” standard for steel service centers.
SMU Question: Are you looking to grow your footprint further in North America and beyond?
Jeremy Flack: Yes. For the next 24 months, we will concentrate on the many organic growth opportunities we have as well as on the integration of the operations of Flack and KPM. Over the next 2-5 years we will be looking for select mergers/acquisitions to continue to support the growth of the platform. The idea is to get to $1 billion in revenue by year seven. It is one thing to have a great little model, differentiated from competition, but to truly impact the marketplace with our concept, we must have scale.
SMU Question: Do you think other companies concentrate on their percentage of ownership more than what it is going to take to compete in the future?
Jeremy Flack: Yes – great point. And, many of our competitors are family businesses more interested in estate planning than growth. We are looking for opportunities where the principals want to stay involved, not cash out, but roll into something larger than themselves. I have accepted long ago that I will not own 100% of Flack Global Metals, but I would rather own less of something durable, independent, and truly successful than more of an organization which is the opposite.
SMU Question: Your company has purchased/merged with a number of different companies where the unique thread may be flat rolled specific but otherwise independent of one another. Do you think it is important for the new service center industry to be less focused on one or two end use markets and to expand its view of the industry?
Jeremy Flack: I think it is important that as distribution we find the highest and best way to add value to our customers’ businesses. The next frontier for Service Centers is to figure out how to help their customers grow their market, not simply make push forward sales. That is what we do at Flack Global Metals and is primarily why we have had so much traction since inception in 2010.
In an industry where tonnage talks Flack Global Metals purchases about 32,000 tons of flat rolled steel products per month.