Extreme Steel to consider additional acquisitions after recent Superior Iron Works deal
Extreme Steel, a Winchester, Virginia-based steel fabrication and erection company, is considering additional acquisitions following its deal for Superior Iron Works earlier this month, President and CEO Robert Pelham said.
Potential acquisitions would help the company expand its capacity in fabrication and field construction and expand to more US states, he said. The District of Columbia, Maryland, Virginia and the mid-Atlantic region is its current focus, he added.
Extreme Steel has a list of acquisition targets on its radar, he said, declining to say if it is already in talks with some of them. It looks at targets in the low mid-market and mid-market, he added without being more specific.
It plans to fund potential deals with its own resources and senior lending, but it is also open to raise equity, CFO George Skaros said in the same interview. Venture capital or private equity firms, institutional investors and family offices could be of interest, he added, noting that Extreme Steel considered raising external capital in the past but decided against it as it did not deem it necessary.
Extreme Steel, which is profitable, expects its undisclosed revenues to grow between 20% and 25% in 2024, similar to its growth in the past years, Skaros said.
According to Skaros, the steel fabrication and erection market is very fragmented with several players offering either fabrication or field construction, however, Extreme Steel is vertical integrated allowing it to offer both services, the CFO said.
Extreme Steel on 19 August announced it acquired Superior Iron Works, which offers design, engineering, fabrication and installation services, for an undisclosed amount. The deal will be funded with Extreme Steel’s own resources and senior lending, the CFO said for this report.
With the deal, which Extreme Steel expects to integrate in about four months, the company gains a fabrication facility and service centre in Sterling, Virginia, bringing its total facilities in the region to four, according to a company press release.
Superior Iron Works recorded revenues of USD 19.9m, according to Zoominfo and Datanyze.
Chairman of the board and founder Kevin Rodney is Extreme Steel’s largest shareholder, Pelham said. The company has 313 employees, he added.