Metal manufacturers ride the M&A wave

Over the past 30 years, metal distributors have worked to reduce the inherent volatility of their business and improve profits. In doing so, many have expanded into value-added fabrication, vertically integrating the supply chain to be a single-source supplier of both raw materials and fabricated components—and, in some cases, even finished assemblies shipped directly to OEMs.

At the same time, distributors and fabricators alike are undergoing a transformation driven by continued advances in manufacturing automation and greater access to investment capital—a combination that, in many cases, continues to favor larger and larger enterprises.

The rapid pace of M&A activity across metal distribution and fabrication reflects several converging dynamics reshaping the competitive landscape. Private equity groups and strategic buyers are executing roll-up strategies to gain scale, expand geographically, and strengthen value-added capabilities. In the U.S. alone, more than 100 M&A transactions over the past three years have involved distributors and fabricators in some way. Some have combined several fabricators—a horizontal play—but other transactions go vertical as well, merging distributor and fabricator under one corporate umbrella.

What’s driving all this activity, and what should a fabricator do when a potential buyer knocks on the door? The more sellers know what potential buyers are looking for, the better they can position their operations for long-term success.

Demographics, Technology, and the Competitive Landscape

Founder succession challenges continue to fuel M&A. Many small and midsized fabricators remain family owned, often led by aging founders. Without clear succession plans, these companies risk declining value and few exit options.

Moreover, mid-market firms face growing pressure on pricing, service, and efficiency—and investors are starting to realize just how much efficiency can be gained by scaling up, reinvesting in the business, and harnessing all the potential new technology can offer. Advancements in high-efficiency fabrication equipment and sophisticated production control software give important competitive advantages across the supply chain. Leading-edge ERP platforms, capable of integrating production operations into well-oiled system, help maximize the utilization of labor, material, and machines.

About Geography

As larger firms acquire small- and middle-market distributors and fabricators, they expand their geographic reach and, in doing so, strengthen their competitive position. Expanding geographically also can lead to more dominance in specific industry sectors.

Say an East Coast distributor with first-step-fabrication has deep market penetration in construction equipment. The company sells to custom fabricators, but it also sells cut and formed parts directly to OEMs. If that East Coast distributor acquires another distributor in the Midwest or West Coast, it can extend its competitive strengths in construction equipment to a new geographic area.

Vertical and Horizontal Consolidation

Vertical integration has accelerated in recent years. Distributors are acquiring custom fabricators, welding operations, coaters, and other entities farther down the metal manufacturing value stream. Stand-alone companies are being squeezed by integrated competitors that control both the inputs and value-added processes.

All this vertical integration is happening along with horizontal plays, with distributors acquiring other distributors; fabricators acquiring other fabricators, machine shops, powder coaters, and other service provides; and integrated operations (those that offer both distribution and fabrication) buying other integrated players. How integrated the combined operations really become depend on a host of factors, including the markets companies serve, data collection, software investment, and the reputations of acquired brands. The fact remains, however, that industry consolidation is happening—and fast.

Horizontal plays still dominate, of course—no surprise, considering how fragmented and diverse metal manufacturing is—but some significant vertical plays remain in the mix. Regardless, the sheer number of deals happening over the past few years alone is truly eye-opening. What follows is just a sampling.

November 2025: Horizontal Play, Fabrication. IES Holdings, a construction company riding the data center wave, signed a definitive agreement to buy Gulf Island, a structural fabricator that’s key to IES’s ability to support the building and rebuilding of U.S. Infrastructure.

October 2025: Horizontal Play, Distribution and Fabrication. In one of the largest deals announced in recent memory, Ryerson Holdings and Olympic Steel signed a definitive merger agreement. The transaction, to close next year, will join two industry giants. Both are distributors that offer value-added processing and own various metal fabricators.

October 2025: Horizontal Play, Distribution. Nova Steel, a distributor, completed the acquisition of another distributor, Sheffield Steel Products.

September 2025, Horizontal Play, Stamping and Fabrication. Pennant Inc. acquired Miami Valley Laser Fabrication. The move expanded company offerings, from low-quantity laser cutting and press brake forming to higher-quantity stamping.

September 2025: Horizontal Play, Tube Fabrication. Elkhart Tri-Went Industrial, Geneva, Ind., acquired Custom Tube Products in Edgewater, Fla., expanding the operation’s geographic footprint.

August 2025: Horizontal Play, Diversified Holding Company. Brattle Technologies purchased Lockwood Manufacturing. This is a prime example of another acquisition type happening in metal manufacturing. Brattle is a diversified holding company of specialty businesses, including a range of metal manufacturers that now include Lockwood, a sheet metal fabricator specializing in equipment for food service, health care, hospitality, and laboratory sectors.

May 2025: Horizontal Play, Fabrication. In one of this year’s blockbuster deals, MEC acquired Accu-Fab. The move broadened MEC’s customer base, including (most critically) to customers in the data center market.

March 2025: Vertical Play. Kloeckner Metals bought Haley Tool & Stamping. This stamping operation complements American Fabricators, a contract sheet metal fabricator Kloeckner acquired a decade ago.

January 2025: Horizontal Play, Distribution. Lapham-Hickey Steel acquired Aklar Steel.

November 2024: Horizontal Play, Distribution. Mill Steel acquired Maryland Metals Processing.

November 2024: Vertical play. Olympic Steel acquired Metal Works, a metal fabricator focused on thin-gauge processing—primarily coated carbon steel and aluminum for gutters, trim, solar canopies, and service station canopies.

April 2024: Horizontal Play, Distribution. Reliance Inc. acquired MidWest Materials Inc.

March 2024: Horizontal Play, Distribution. Lapham-Hickey Steel acquired Crystal Steel Corp.

November 2023: Horizontal Play, Distribution. Ryerson acquired TSA Processing.

April 2023: Horizontal Play, Plate Processing and Fabrication. BICO Steel, a metal fabricator specializing in plate cutting and machining, acquired RE Metal Finishing, which provides peening and metal finishing services.

June 2023: Horizontal Play, Metal Fabrication and Extrusion. MEC acquired Mid-States Aluminum Corp. The deal gave MEC access to MSA’s aluminum fabrication and extrusion expertise.

June 2023: Vertical Play. Olympic Steel acquired Metal-Fab Inc., a Wichita, Kan.-based fabricator specializing in venting and filtration products.

Again, this is just a portion of all the metal manufacturing transactions from the past few years. Major industry players have initiated numerous transactions over the past few decades. And this doesn’t just apply to behemoths like MEC, Ryerson, and Reliance.

Consider Lapham-Hickey Steel, a family-owned metal distributor founded nearly a century ago. Since the 1980s, the firm has successfully completed 10 acquisitions, five of them in the past five years. These include not just horizontal plays (other distributors) but vertical ones too. In 2022, it purchased SMC Metal Fabricators in Oshkosh, Wis.

Guidance for Business Owners

Facing market transformation, small and midsized businesses must respond with carefully crafted strategies and strategic investment to meet rising competitive pressures. Alternatively, they can decide to join a more dominant firm through an acquisition.

Those firms choosing the strategic investment route need a long-term vision for the business and a clear, strategic market and technology plan to help guide them through a rapidly consolidating market. By aligning operations with evolving customer needs and the overall competitive landscape, the strategic plan should strengthen the company’s market position and, not least, protect margins.

The other route involves planning for acquisition from a larger or more dominant firm. Here, owners must understand what buyers are looking for, then work to position the company in a way to maximize valuation.

Buyers seek potential, not perfection. They typically look for companies with $2 million-plus EBITDA; recurring customer relationships; and specialized capabilities such as architectural metals, aerospace, or precision fabrication. Certifications like ISO or AS9100, owned real estate, clean financials, and scalable technology or automation can all help drive valuations higher.

Owners preparing for sale can enhance value by emphasizing proprietary strengths, recurring revenue, and active quoting pipelines. Demonstrating capacity for growth, separating real estate and equipment from core operations, and maintaining diligence-ready records help buyers clearly see value and, hence, foster a smooth transaction.

Industry Consolidation Is Here

What business owners shouldn’t do, of course, is pretend the industry isn’t changing. Again, the sheer number of transactions reflects accelerating roll-up strategies by strategic buyers and private equity. Shop owners are retiring, buyers see opportunity, and large OEMs and other customers see the value of larger geographic footprints.

Consolidation is happening. To adapt, owners aiming to sell or grow must define their strategic vision clearly; be highly automated and profitable; and maintain clean, diligence-ready records to maximize valuation in a rapidly integrating sector.