Stelco, the Hamilton-based steel company that rose from the depths of insolvency just a few years ago, is looking to expand.
A statement from the company’s latest financial results for the first quarter of 2019, says executive chairman, Alan Kestenbaum, “is leading efforts to actively evaluate a number of strategic and accretive M&A (merger and acquisition) opportunities that have started to emerge.”
President and former investment banker David Cheney also hinted at future expansion for the company.
“As we look forward, demand from most of our key end markets remains stable and we are utilizing our logistics infrastructure to continue to expand our market footprint,” said Cheney.
He goes on to say: “Overall, we are optimistic for the future as Stelco is extremely well positioned to deliver attractive organic and inorganic growth.”
READ MORE: Stelco pushes for more support for steel industry in meeting with Trudeau
Led by Kestenbaum and Cheney, it appears the company has shaken off its liabilities in a short period of time and emerged with nearly half a billion dollars in revenue, as stated in its latest financials from March 30.
The summary revealed the company has no financial debt, $285 million in cash and $577 million in total liquidity.
Marvin Ryder, assistant professor of Marketing and Entrepreneurship at McMaster University, is one of several market analysts surprised by the announcement and the company’s quick transition out of bankruptcy protection.
LISTEN: Marvin Ryder, Assistant Professor of Marketing and Entrepreneurship at McMaster University, talks about Stelco’s remarkable turn around with Global News Radio’s Bill Kelly
“It is really quite amazing that less than two years after being in bankruptcy protection, Stelco is not only is a healthy company but is on the road to buy some more.”
Ryder says limiting liabilities with the employee pension plan, and help from the provincial government with environmental cleanups have been factors in providing the company with a healthy bottom line.
In light of mentioning potential expansion, Ryder says he would not be surprised if the company makes some sort of acquisition before the year is out.
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“This is Mr. Kestenbaum’s modus operandi,” Ryder told Global News Radio’s Bill Kelly. “He gets into an industry, buys a company as a base, gets it good and healthy, then starts out and adding more pieces to it to grow it over a 10- to 15-year period.”
In April, Kestenbaum met with Prime Minister Justin Trudeau to garner more support from Ottawa as Canada’s steel and aluminum producers deal with punishing U.S. tariffs imposed on exports south of the border.
WATCH: Freeland in DC pushing for U.S. tariffs to be removed
In February, after announcing glowing fourth-quarter results for 2018, Kestenbaum said the industry was still facing pressures from tariffs.
A tariff of 25 per cent imposed by the U.S. on foreign steel has created a “surge” in certain types of steel products coming into Canada.
“We are continuing with efforts to reduce our tariff exposure into 2019 and fully support the Canadian government’s efforts to eliminate the 232 tariffs against Canadian steel,” said Kestenbaum in a statement.
With files from the Canadian Press and Amanda Connolly
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