Our experience in the steel industry gave Ryerson shareholders confidence that we would successfully acquire and operate the $6.1 billion steel giant.The Framework of America
Founded in 1842, Ryerson provided the steel that framed America. Farm implements, railroads, automobiles, and new construction methods all required steel, and Ryerson delivered. Phenomenal growth and strategic acquisitions through the decades increased Ryerson’s product and service offerings nationally and internationally. By the mid 1990s, Ryerson was the preeminent metal services provider in the world.
In the early 2000s, Ryerson made several operational miscalculations and lost significant market position. Centralized operations, standardized products, and an expensive but unfulfilled SAP implementation had harmed customer confidence and dissatisfied shareholders.
Decision to Sell
In the summer of 2007, Ryerson shareholders sought a buyer that understood the industry and could solve its complex issues. Over 50 prospective acquirers were contacted and reviewed. Platinum Equity was selected as the preferred transaction partner because of our operational knowledge, metals industry knowledge, and competitive offer: a 15% premium over Ryerson’s closing share price at the time.
Positive Change with Platinum
After closing the public-to-private deal, Platinum and Ryerson management set out to turn the business around through a series of carefully phased changes:
- Reconfigured its centralized business into a regional structure to improve customer service and supply chain efficiencies
- Consolidated multiple facilities and formed stronger regional territories
- Introduced an 80/20 process to focus on the best and most profitable products, then further segmented the process by market size to recognize product mix and to increase customer access
- Focused on properly utilizing the the SAP implementation
Proven Market Expertise
With our acquisition of steel processor PNA Group in 2006 and then Ryerson in 2007, we quickly put our track record of implementing successful operational solutions to the test. We faced and overcame the challenges of rising labor and commodity costs, competitive threats, and Asia outsourcing with successful operations-based solutions—another example of how our operational expertise gives us a distinct advantage across an entire sector.
“Since going private in 2007 our partnership with Platinum has allowed us to dramatically transform our business to operate more efficiently, more nimbly and more responsively to our customers than ever before.” —Stephen Makarewicz, President and COO, Ryerson