Reliance Steel to acquire Durrett-Sheppard No loss of local jobs expected in takeover by Los Angeles firm


January 15, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Durrett-Sheppard Steel Co., a 35-year-old Baltimore-based metals service center, will be acquired by Reliance Steel & Aluminum Co. of Los Angeles for an undisclosed amount, the companies said yesterday.

The Baltimore company, which specializes in processing and distributing carbon steel plate, structural and bar products, employs almost 200 people. Durrett-Sheppard had sales of about $47 million in its fiscal year ending Sept. 30.

In Canton Industrial Park near the intersection of Interstate 95 and Eastern Avenue, Durrett-Sheppard opened a second distribution center last year in the former Vincent Metals building on Monument Street in East Baltimore.

Reliance is one of the nation's largest metals service center companies. It processes metals and distributes metals products through a network of 44 service centers in 16 states. Reliance had annual sales in 1996 of $654 million.

"Durrett-Sheppard has a leadership position in their market, a reputation for excellent customer service, and is similar in operating philosophy to Reliance," David H. Hannah, president of Reliance, said. "This acquisition enables us to penetrate a new and exciting market area, while also expanding our customer base."

Ralph H. Gibson, president and chief executive of privately held Durrett-Sheppard, said the deal made sense because of an industry trend toward consolidation.

"It has become increasingly apparent that a stand-alone independent operator is going to come under significant financial pressure," Gibson said.

Among the benefits of the deal for Durrett-Sheppard is purchasing power that comes with size. The company will also benefit from Reliance's computer systems, he said.

He said none of the employees will lose their jobs. "I don't think that's always the case in these situations," Gibson said.

Reliance announced four acquisitions last year.

"We have in the past 18 months dramatically increased our presence in the east side of the country," said Steven Weis, Reliance's chief financial officer.

Durrett-Sheppard will operate as a wholly owned subsidiary of Reliance. Its chief financial officer, Henry Hynson, will replace Gibson as chief executive. The deal is scheduled to close Jan. 30. "I'm basically an entrepreneur," Gibson said. "I chose not to stay on."

Gibson bought the company with two financial partners in 1995 for an undisclosed amount. During that time, employment increased from about 140 to 198. Sales increased from about $39 million to more than $47 million. He would not disclose the company's earnings.

dTC Before coming to Baltimore, Gibson was president and chief executive officer of Motorbooks International, a publishing and wholesale company based in Osceola, Wis.

He is the husband of Mary Junck, president of Times Mirror Co.'s eastern newspapers, which include The Sun.

Pub Date: 1/15/98

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