Firms Buy Up Bankrupt Lee Steel Assets
08/21/2015 - A private equity firm with a portfolio of metals service centers has acquired bankrupt Lee Steel Corp., the firm has announced.
Cleveland-based Union Partners is buying all of Lee Steel's assets at its Wyoming, Mich., USA, facility and consolidating operations from Lee's newer Romulus, Mich., USA, facility at Wyoming.
“This was an opportunity to add significant talent to our family of companies; not only does Lee Steel have an exceptional staff, but they arguably have some of the finest equipment and service provided in Michigan," said Union Partner's Chris Hutter in a statement.
"We look forward to Lee Steel’s bright future and will continue to focus on the needs and services of Lee Steel’s customers,” he said.
Lee Steel will join Union Partners' affiliated group of steel service centers, which includes Lexington Steel Corp., LexWest LLC, Lex South LLC, Mapes & Sprowl Steel LLC, Chicago Steel Holdings LLC, JIT Steel Services LLC and Opus Metals LLC.
"This is the dawn of a new day for Lee Steel, and the entire Lee team is excited about the future,” said Lee Steel CEO Zachary Taylor in a statement.
Separately, financial services firm Hilco Global is acquiring Lee's Romulus facility and the manufacturing equipment there. Its intent, it said, is to flip the facility, either as a whole or in part.
“Hilco Global is planning to run an aggressive marketing and sale process to find a buyer for this state-of-the-art steel processing complex following the mid-September closing,” said Ben Nortman, a Hilco Global executive vice president, in a statement.
The facility is being acquired by a joint venture between Hilco companies Hilco Real Estate LLC and Hilco Industrial LLC.
“This is an impressive, state-of-the-art steel processing facility, which makes it a very valuable asset," said Hilco Industrial managing partner Steve Wolf in a statement.
In large part, the facility is to blame for Lee Steel’s financial troubles.
“Unfortunately, the original owners at Lee Steel recently expanded and invested heavily in the new Romulus facility just as the dramatic decline in world steel demand hit that substantially lowered commodity prices," said Laura Marcero, managing director of Huron Consulting Group and Lee Steel’s chief restructuring officer, in a statement.
The 250,000-square-foot facility, which sits outside of Detroit, was estimated to cost US$26 million, according to Crain's Detroit Business. The facility houses an environmentally friendly pickling line that uses water and steel grit instead of acid to remove scale from steel coils.
Lee filed for Chapter 11 bankruptcy protection in April 2015, saying it owed between US$50 million and US$100 million, according to Crain's.
“This was an opportunity to add significant talent to our family of companies; not only does Lee Steel have an exceptional staff, but they arguably have some of the finest equipment and service provided in Michigan," said Union Partner's Chris Hutter in a statement.
"We look forward to Lee Steel’s bright future and will continue to focus on the needs and services of Lee Steel’s customers,” he said.
Lee Steel will join Union Partners' affiliated group of steel service centers, which includes Lexington Steel Corp., LexWest LLC, Lex South LLC, Mapes & Sprowl Steel LLC, Chicago Steel Holdings LLC, JIT Steel Services LLC and Opus Metals LLC.
"This is the dawn of a new day for Lee Steel, and the entire Lee team is excited about the future,” said Lee Steel CEO Zachary Taylor in a statement.
Separately, financial services firm Hilco Global is acquiring Lee's Romulus facility and the manufacturing equipment there. Its intent, it said, is to flip the facility, either as a whole or in part.
“Hilco Global is planning to run an aggressive marketing and sale process to find a buyer for this state-of-the-art steel processing complex following the mid-September closing,” said Ben Nortman, a Hilco Global executive vice president, in a statement.
The facility is being acquired by a joint venture between Hilco companies Hilco Real Estate LLC and Hilco Industrial LLC.
“This is an impressive, state-of-the-art steel processing facility, which makes it a very valuable asset," said Hilco Industrial managing partner Steve Wolf in a statement.
In large part, the facility is to blame for Lee Steel’s financial troubles.
“Unfortunately, the original owners at Lee Steel recently expanded and invested heavily in the new Romulus facility just as the dramatic decline in world steel demand hit that substantially lowered commodity prices," said Laura Marcero, managing director of Huron Consulting Group and Lee Steel’s chief restructuring officer, in a statement.
The 250,000-square-foot facility, which sits outside of Detroit, was estimated to cost US$26 million, according to Crain's Detroit Business. The facility houses an environmentally friendly pickling line that uses water and steel grit instead of acid to remove scale from steel coils.
Lee filed for Chapter 11 bankruptcy protection in April 2015, saying it owed between US$50 million and US$100 million, according to Crain's.
