It's hard to believe that barely two years ago, between September 2008 and early 2009, publicly-traded service centers lost over $7.0 billion of shareholder value. This loss was so significant that the industry has spent the time since re-examining and recalibrating its business model. The result is an industry that is primed for a new round of mergers and acquisitions, although transaction activity remains tepid as sellers continue to hold out for higher valuations. As 2011 progresses, however, the growing imperative to create shareholder value is likely to compel service centers to consolidate. Although mid-market service centers remain largely constrained from pursuing M&As, given their modest size, larger competitors are starting to seek out transaction opportunities—and the mid-market is an attractive space.
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