MiddleGround Capital Acquires Metals Distributor A.M. Castle - Modern Distribution Management

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MiddleGround Capital Acquires Metals Distributor A.M. Castle

Castle Metals is a provider of metals, services and supply chain solutions serving industrial and aerospace customers.

On June 15, Lexington, Kentucky-based private equity firm MiddleGround Capital announced it has acquired Oak Brook, Illinois-based A.M. Castle & Co., (Castle Metals) a provider of metals, services, and supply chain solutions serving industrial and aerospace customers.

Castle Metals has more than 20 total service center locations throughout North America, Europe and Asia.

“Castle Metals has long been recognized as a leading processor and distributor of specialty metals, serving both aerospace and industrial customers globally,” said Dan Stoettner, Chief Executive Officer at Castle Metals. “With the additional insight and guidance provided through MiddleGround’s team of operational experts, we are excited to enter the next phase of growth as we continue to establish ourselves as a metals industry leader. MiddleGround’s vision fully aligns with our goals, and together I am confident we will enhance our ability to provide the broadest range of high-quality metals as well as solve distribution, pricing, processing and supply challenges both globally and locally.”

Ducera Partners advised Castle Metals on the transaction. Fifth Third Bank partnered with MiddleGround Capital to provide the senior financing to complete this transaction and serves as Caste Metal’s sole bank lender, post-close, according to a news release.

“MiddleGround has been following Castle Metals for several years and we jumped at the opportunity to acquire the company,” said John Stewart, Founding and Managing Partner of MiddleGround Capital and Chairman of the Board of both Banner and Castle Metals. “MiddleGround has been invested in the specialty metal space since 2019, starting with our acquisition of Banner Industries and Banner Medical Innovations. MiddleGround is looking to transition the Banner Platform into a Special Purpose Vehicle in which Banner and Castle would combine under one capital structure allowing the company to execute on several opportunities to optimize the operations of both businesses. Banner has been a strong performing investment for Fund I and under our ownership, the company has grown from ~$100 million of revenue and ~$9 million of EBITDA to a business with over ~$300 million of revenue and over ~$65 million of EBITDA.

“This investment is led by a strong management team and the company has seen strong organic growth and the completion of three acquisitions. Castle Metals has an established global presence and strategic relationships with blue-chip customers within both industrial and aerospace end markets, with limited customer concentration. With this acquisition, our specialty metal platform will be even better positioned to fill the underlying demand across key end markets. We look forward to further capitalizing on Castle’s existing strong customer base, footprint, capabilities, and product offering.”

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