An article by Forward magazine (published by the Metals Service Center Institute) looked at Platinum Equity -a private equity firm relatively well-known in the distribution industry for its investment in Strategic Distribution and bid for Industrial Distribution Group. It also owns Ryerson Inc. and recently sold PNA Group to Reliance Steel and Aluminum. While much of the article is focused on how well Platinum has done in the metals industry and how its operating model is different from other private equity firms, it does provide a decent glimpse into how it approaches investments. For one, Platinum has tended to look at moves its makes much as a strategic player would. For example, when it bid for Industrial Distribution Group, the private equity firm was looking to complement Strategic Distribution's core competencies. (It lost that bid to another private equity firm.)
The Forward article also includes a sidebar on how the $6 billion metals distributor Ryerson (scroll down to the orange section at the end) has decentralized since being purchased by Platinum. According to the article: "The problem was that 'service centers are pretty much a local business in the end. You can't run a service center in Los Angeles effectively out of Chicago. You have got to be in that market. You have to understand the customers, the supply chain in that market, and you have to give your local people the flexibility to stock what they need to effectively serve their market. Yet we were trying to build this highly centralized, everything done-out-of-Chicago business that provided to be problematic.'"
Click here to read the Forward article.