Stainless Steel
Thursday | 08 September, 2011 | 2:13 pm

A logical buy

By Nick Wright

Universal Stainless gains radial forge with purchase of Patriot Special Metals

September 2011 - In a move that adds the Western Hemisphere’s largest hydraulic radial forge to its services, Bridgeville, Pa.-based Universal Stainless & Alloy Products has acquired the assets of Patriot Special Metals, North Jackson, Ohio, a subsidiary of Patriot Forge Co., Brantford, Ontario. It’s a logical next step for Universal as investment in its operations combined with strategic marketing to industries—such as aerospace, power generation, and petrochemical—has helped the company focus on faster deliveries and expanding its product offering. The deal closed on August 18th.

“We’re strong believers that consolidation in the industry makes some sense,” says Dennis Oates, president and CEO at Universal Stainless. “That led us to look not just at our own facilities, where we’ve had record capital spending here over the last several years, but also what we could do partnering with someone outside of the company.”

Universal’s acquisition of Patriot, valued at $104.5 million plus another $25 million in equipment installation, includes the state-of-the-art radial forge, capable of handling large and long forged billets and bars in square, round and custom shapes up to 16 inches. That will allow Universal the ability to process higher value and higher margin products for power generation, general manufacturing and industrial tooling industries in addition to aerospace and petrochemical. The entire North Jackson facility is a 220,000-square-foot greenfield facility. 

An 18-ton vacuum induction furnace (VIM) facility, slated for an early 2012 startup, will complement the forge at North Jackson and enable Universal to produce high nickel alloy products. Two vacuum arc remelt furnaces (VAR) will be delivered in September and come online in the fourth quarter of 2011, on top of seven that Universal currently runs, Oates says. “We can see ourselves tapping our heads against capacity in those areas. So we needed some additional VAR capacity and there happens to be two that were already scheduled to go into North Jackson,” he says. Approximately 40 percent of Universal’s business came from the aerospace industry in the second quarter of 2011.

Universal is investing $6 million, separate from the Patriot acquisition, in an inert gas electro slag remelt furnace (ESR) at the North Jackson plant, geared toward producing a cleaner, higher-durability steel for power generation industry clients. The company currently has four ESR furnaces in operation.

“A lot of OEMs that we work with on the power-generation side, which would primarily be ESR applications, are constantly looking for ways to improve their turbines," explains Christopher Zimmer, vice president of sales and marketing at Universal Stainless. "So that they can offer the market a turbine with a longer life that has better efficiency and operates in more aggressive environments. The specialty steels that we’ll be producing from our new inert gas ESR unit are going to be a better quality than traditional ESR technology, giving our customers a competitive edge.”

Trending consolidation
Discussions began in October 2010 with Patriot, according to Oates. “We were lacking certain pieces of equipment and it just so happened that 80 miles away from our home plant was a brand-new facility going up” that had VIM, VAR and ESR capabilities, he says. Universal’s relatively small size has allowed it to move quickly on the acquisition and focus on serving its market more quickly. The North Jackson location will be Universal’s fourth, complementing it’s Titusville, Pa., facility and Dunkirk Specialty Steel in Dunkirk, N.Y.

The radial forge is expected to be up and running once loose ends are tied up with the commissioning process and when the forge is working up to specification. Nonetheless, timing for the acquisition couldn’t be better: a July press release indicated in the second quarter, the company posted $63.3 million in sales and achieved its highest operating margin since 2007. Its annualized sales sit between $235 million and $250 million, according to Oates.

Because the Patriot facility is new and not an ongoing, operating enterprise, the peripheral issues such as redundancies and overlaps of Universal and Patriot were avoided, which commonly arise in typical mergers. “The biggest challenge we’ve had here is making sure we’re making a good investment for our stockholders,” says Oates. “We’re confident also because our customers have been pushing us in this direction.” MM

mm sm ed cal banner330px 2016

MM Cover 10 15 digital

vert-current-linewhiteOctober 2015

2016 End User Outlook

Although low pricing on metal products across the globe once inspired companies to stock up, there’s little appetite for risk peering into 2016.


Instagram - @ModernMetalsMag

MIDWEST register deadline3

Modern Metals on Twitter


Industry Partners


PNC BankDoALL Sawing ProductsStraub Metal International


Executive Search Services

Sawing Technology

Stainless Steel

Aluminum USA 2015 Leadership Search Group Advanced Machine & Engineering Rolled Alloys
Kaiser Aluminum

Financial Services

Behringer Saws, Inc. Scan Tube/Nebetco Stainless
Sapa Extrusions North America BMO Harris Bank Cosen International, Inc. Stainless Sales Corporation
Gerdau Special Steel North America

Industrial Contracting Solutions


Stainless Steel Service Center

CNC Cutting (Plasma, Waterjet, Laser, Router)

Delta Industrial HE&M Saw Comprinox
Multicam Inc.

Laser Technology


Stainless, Nickel, Aluminum, Pipe, Tube & Bar

Coated Coil

Amada America, Inc. Kasto Inc. Prudential Stainless & Alloys, L.P.
Centria Coating Services Mazak Optonics Corp. KMT Saw


Coil Coatings

Machining Centers

Lenox Alliance Steel LLC
Chemcoaters Handtmann CNC Metlsaw Systems Central Steel Service, Inc.

Coil Processing

Material Handling Pacesetter Steel Service, Inc.
Applefelt Combilift USA Scotchman Industries, Inc. Parker Steel Co.
Bradbury Group Samuel Strapping Systems Specialty Saw Inc. SSAB
Braner USA Steel Storage Systems Inc.

Service Centers

Steel Dynamics, Inc.
Butech Bliss Walker Magnetics North American Steel Alliance

Thickness Gauges


Milling Machinery

Reliance Steel & Aluminum Co. Advanced Gauging Technologies
Formtek Maine Amada Machine Tools America, Inc. United Performance Metals


Machine Concepts

Perforated & Expanded Metal


Carlson Tool & Manufacturing Corp.
Red Bud Industries McNichols Co. Compusource Corporation

Tube & Pipe

Copper & Brass


Enmark Systems, Inc. Independence Tube Corp.
Christy Metals Inc. Allor Manufacturing Inc.


Specialty Pipe & Tube, Inc.
Concast Metal Products Churchill Steel Plate Ltd Venus Stainless NA Yoder
Farmer's Copper



Tube Mill Equipment & Machinery

National Bronze & Metals








GRB Innovations LLC



OMAX Corporation








Koike Aronson




XRF Analyzer




Olympus Scientific Solutions Americas


Instagram Icon Large twitter facebook linkedin rss

FFJ 1115 brandingcovers