Stout Advises State Steel Supply on Combination with SPS Companies

Stout has advised State Steel Supply, North America’s 38th largest service center, in its combination with SPS Companies Inc., North America’s 15th largest service center. Stout served as the exclusive financial advisor to State Steel in connection with the transaction.

Headquartered in Sioux City, Iowa, State Steel operates steel distribution and fabrication operations in six locations in Iowa, Nebraska, and South Dakota.

SPS, headquartered in Manhattan, Kansas, has steel distribution and fabrication operations located in 11 U.S. states, as well as in Monterrey, Mexico.

State Steel will continue as an independent business unit, and David Bernstein, who presently leads the businesses, will continue his role as president of State Steel with the current senior management retaining their positions and responsibilities. The scrap business Sioux City Compressed Steel and Kooima ownership held by the Bernstein family will not be part of the transaction. Bernstein will also become an SPS shareholder in the transaction and join the board of directors.

SPS and State Steel jointly acquired the job shop operations of Kooima Company back in 2019. “Through the collaboration with SPS on Kooima, it became apparent that SPS is a highly logical fit, as both companies are private and share very similar cultures, including greatly valuing our team members and customers,” Bernstein said.

“SPS has a corporate structure that will allow the State Steel business model to continue to grow and thrive well into the future, leveraging synergies with a top tier organization, with a primary mission of continuing to serve our customers’ needs for high quality materials and service,” he added. “Our customers will see a seamless transition with their same sales contacts and the same commitment to quality products and services they have grown to trust with State Steel.”

Mike Jenny, Stout’s Managing Director and Head of Metals & Specialty Manufacturing, shared, “This transaction exemplifies Stout’s commitment to providing value-driven advisory services that align with the strategic goals of our clients. It was a privilege to support State Steel in positioning the business for continued success in combination with SPS Companies, Inc.”

The transaction was led by Mike Jenny, Zach Pifher, and Anya Choksi of Stout’s Investment Banking team.

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