Steel Connect, Inc. (STCN): History, Ownership, Mission, How It Works & Makes Money

When you look at a diversified holding company like Steel Connect, Inc. (STCN), are you seeing a niche supply-chain player or a strategic asset about to be fully absorbed by its parent? For the first quarter of fiscal year 2025, Steel Connect reported net revenue of $50.5 million, a significant 22.1% jump, but this growth narrative is overshadowed by the imminent short-form merger with Steel Partners Holdings L.P., which is set to take the company private.

This is a micro-cap story-with a recent market capitalization of just $77.16 million-that demands a close look at the underlying ModusLink business, especially since the merger offers shareholders $11.45 in cash per share plus Contingent Value Rights.

So, what does a company that provides critical supply chain services, from kitting to reverse logistics, actually look like when it's transitioning from a public entity to a wholly-owned subsidiary? It's defintely time to understand the history, ownership structure, and true value proposition of Steel Connect before the final curtain drops on its public trading life.

Steel Connect, Inc. (STCN) History

You're looking for the origin story of Steel Connect, Inc., and honestly, it's a financial analyst's dream: a journey from a simple mailing list company to a dot-com bubble star, and finally, a streamlined supply chain powerhouse taken private by its majority owner. The company you know as Steel Connect today is the result of decades of dramatic corporate reinvention, starting with a crucial leveraged buyout (LBO) in 1986.

Given Company's Founding Timeline

Year established

The company's ultimate origin is 1968, but the corporate entity that evolved into Steel Connect was formally incorporated in Delaware in 1986, after a pivotal leveraged buyout.

Original location

The initial company, College Marketing Group, was founded in 1968. The entity that became CMGI and later ModusLink Global Solutions, Inc. was headquartered in the Boston area, specifically in Waltham, Massachusetts, during its high-growth internet incubator years.

Founding team members

The original founders of the 1968 predecessor, College Marketing Group, were Glenn and Gail Mathews. The true founder of the modern, publicly-traded entity was David Wetherell, who acquired the company in the 1986 LBO and steered it toward the internet.

Initial capital/funding

The company's first major public funding event was its Initial Public Offering (IPO) in February 1994. The company sold 1.2 million shares at $8.00 each, raising $9.6 million in gross proceeds to fuel its early tech investments.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The history of Steel Connect, Inc. is defintely a series of near-death experiences and massive pivots. The biggest shifts weren't incremental; they were bold, high-stakes moves that fundamentally changed the business model.

• The 1986 LBO: David Wetherell's takeover and the shift to CMG Information Services was the first great pivot, moving the company from a niche publisher to a tech-focused holding entity. This set the stage for the entire dot-com era.
• The Dot-Com Incubator Years (1995-2002): This period saw the company, then CMGI, become an internet investment powerhouse. They founded the first internet-only VC firm, @Ventures, and made massive, high-profile investments in companies like Lycos and GeoCities. The $661 million gain from the GeoCities sale was a huge win, but the subsequent 99% stock price crash after the bubble burst forced a complete operational reset.
• The Supply Chain Focus (2004-2018): The acquisition of Modus Media in 2004 and the eventual name change to ModusLink Global Solutions, Inc. in 2008 marked the company's retreat from the volatile investment world to the more stable business of global supply chain management. This was a classic move to find a reliable core business.
• The Steel Partners Consolidation (2023-2025): The most recent, and arguably final, transformation was the full integration into Steel Partners Holdings L.P. The $200 million cash infusion in 2023 and the subsequent short-form merger in early 2025, which took the company private, were clear actions to streamline operations and eliminate the costs of being a public company. Minority shareholders received $11.45 per share, giving them a clean exit. This move allows the ModusLink subsidiary to focus on long-term operational efficiencies without public market pressure.

This history of radical change is why you need to look at the business today, not just its past. For a deeper look at the current operational health, you should check out Breaking Down Steel Connect, Inc. (STCN) Financial Health: Key Insights for Investors.

Steel Connect, Inc. (STCN) Ownership Structure

The ownership and governance of Steel Connect, Inc. underwent a decisive transformation in early 2025, resulting in a fully consolidated structure where a single parent entity holds complete control.

This shift means that the company is now privately held by its majority shareholder, Steel Partners Holdings L.P., which streamlined the decision-making process and eliminated the administrative costs of public reporting.

Steel Connect, Inc.'s Current Status

As of November 2025, Steel Connect, Inc. is a private company, operating as an indirect, wholly-owned subsidiary of Steel Partners Holdings L.P. (SPLP).

This status change was finalized following a short-form merger, which closed on January 2, 2025, and resulted in the company's common stock being delisted from the NASDAQ Stock Market.

The merger was possible because Steel Partners Holdings L.P. already owned in excess of 90% of Steel Connect's outstanding shares on an as-converted basis, allowing the transaction to proceed without a full shareholder vote under Delaware General Corporation Law.

Minority shareholders, excluding Steel Partners and its affiliates, received $11.45 in cash per share at the effective time of the merger. This provided immediate liquidity for investors who were holding a stock with a highly concentrated ownership base. You can read more about the company's strategic direction in its Mission Statement, Vision, & Core Values of Steel Connect, Inc. (STCN).

Steel Connect, Inc.'s Ownership Breakdown

The table below reflects the ownership structure following the completion of the short-form merger in early 2025, which is the reality as of November 2025.

Steel Connect, Inc.'s Leadership

The company's leadership team is responsible for steering the supply chain management business, ModusLink Corporation, as a private subsidiary. The governance structure is closely tied to its parent company, Steel Partners Holdings L.P., with key executives often holding roles or having significant ties to the parent entity.

Here's the quick math: when your majority owner is also a diversified holding company, you defintely benefit from shared resources and a unified strategic vision.

Key executives and directors as of the merger period include:

• Warren G. Lichtenstein: Executive Chairman and Interim Chief Executive Officer. He also holds a significant beneficial ownership in Steel Partners Holdings L.P.
• Ryan O'Herrin: Chief Financial Officer (CFO), appointed in August 2023.
• Fawaz Khalil: Chief Executive Officer and President of ModusLink Corporation, the wholly-owned subsidiary.
• Glen Kassan: Vice Chairman of the Board.
• Jack Howard: Director. Mr. Howard also beneficially owns a portion of Steel Partners Holdings L.P.

This concentrated leadership, with deep ties to the parent company, allows for rapid execution of the post-merger strategy, which is focused on operational efficiencies and optimizing the ModusLink business without the constant pressure of quarterly public market reporting.

Steel Connect, Inc. (STCN) Mission and Values

Steel Connect, Inc.'s core purpose, primarily executed through its subsidiary ModusLink Corporation, is to drive rapid client growth through best-in-class supply chain and eCommerce solutions, all while operating under a clear set of values centered on people and integrity. This focus on operational excellence and ethical conduct is the cultural bedrock, especially as the company navigates its new structure following the January 2025 merger with Steel Partners Holdings L.P..

Steel Connect, Inc.'s Core Purpose

The company's ethos goes beyond the balance sheet. It's about being a reliable, global partner that simplifies the complex logistics of modern commerce, which is critical when you consider their 2024 revenue was $174.11 million and earnings were $20.51 million, showing a business with real-world scale.

Official Mission Statement

The mission is a direct statement of what the company delivers to its clients-a path to expansion and efficiency. It's a very clear mandate.

• Drive rapid growth and global scale for any business seeking best-in-class supply chain and eCommerce solutions.

Honestly, a mission like this shows they understand the pain point of global expansion. They want to be the engine for their clients' market penetration.

Vision Statement

While a single-sentence vision statement isn't formally published, the company's stated goals and priorities reveal a clear, forward-looking vision. The entire operation is geared toward optimizing the flow of goods and data globally, which is the real value proposition for investors looking at the post-merger structure. You can see this focus in their commitment to their employees and the services they deliver.

• Optimize and transform how the world connects through integrated physical and digital supply chain management.
• Provide scalable, end-to-end solutions that drive client growth, lower operational costs, and improve profitability across North America, Europe, and Asia.
• Foster an ethical, diverse, inclusive, and just workplace environment, recognizing that their approximately 1,100 employees are their most important asset.

If you want to understand the company's cultural DNA, you look at their four core values: Teamwork, Respect, Integrity, and Commitment.

Steel Connect, Inc. Slogan/Tagline

The company and its operating subsidiary, ModusLink Corporation, use strong, action-oriented phrases to communicate their value to the market. This one cuts right to the chase.

• Complete Solutions for Global Success.

That tagline is a defintely a promise of comprehensive service, which is what you need from a supply chain partner. For a deeper dive into the numbers behind this mission, you can check out Breaking Down Steel Connect, Inc. (STCN) Financial Health: Key Insights for Investors.

Steel Connect, Inc. (STCN) How It Works

Steel Connect, Inc. operates as a diversified holding company, primarily generating revenue by managing global, complex supply chains for technology and consumer goods companies through its subsidiary, ModusLink Corporation, and offering data-driven direct marketing services.

The company essentially acts as a critical, integrated partner, taking over everything from product assembly and software entitlement to getting a product to a customer's door, which is how it brought in $50.5 million in net revenue in the first quarter of fiscal year 2025.

Given Company's Product/Service Portfolio

Given Company's Operational Framework

The operational framework is built on a global, integrated network designed to streamline the entire product lifecycle for clients, moving past simple logistics to offer value-added services (VAS).

They make money by charging for these integrated services, which range from the physical-like the kitting and assembly of components into a finished good-to the digital, such as managing software licenses. Here's the quick math: the operational efficiency drove a gross profit margin of 34.1% in Q1 FY2025, a significant jump from 27.8% in the prior year.

• Global Footprint: Operates an integrated network of facilities across North America, Europe (like the Netherlands and Czech Republic), and Asia (including Mainland China and Singapore).
• Value-Added Processes: Beyond basic storage and shipping, they perform product testing, Radio Frequency Identification (RFID) tagging, language setting, and personalized engraving.
• Reverse Logistics: Simplifies the product returns process for manufacturers and retailers, which is a massive cost-saver for clients.
• Digital Integration: The Poetic software platform centralizes the management of product entitlements, connecting the physical supply chain to the digital customer experience.

The core value creation is in taking complexity off the client's plate. To be fair, this is a capital-intensive business, but having a global network already in place creates a high barrier to entry for competitors. You can read more about the company's long-term goals here: Mission Statement, Vision, & Core Values of Steel Connect, Inc. (STCN).

Given Company's Strategic Advantages

The biggest strategic shift for Steel Connect, Inc. in 2025 is its transition to a private entity, which completely changes its competitive posture and operational focus.

The short-form merger with Steel Partners Holdings L.P., expected to close in early 2025, is defintely the game-changer. This move gives the company a clear path to long-term optimization without the quarterly scrutiny of the public markets.

• Operational Flexibility: As a private subsidiary, the company can prioritize long-term strategic growth and operational optimization, addressing challenges like customer concentration risk, without the pressure of SEC reporting obligations.
• Integrated Service Model: Combining global supply chain management with software-based entitlement solutions (Poetic) and direct marketing creates a single-source provider, deepening client relationships and increasing switching costs.
• Financial Strength of Parent: Full integration into Steel Partners Holdings L.P. allows for better utilization of deferred tax assets and provides a more stable financial backing, which is crucial for a global logistics provider.
• Proven Cost Management: Strong operational management led to a 123% increase in Adjusted EBITDA to $7.4 million in the first quarter of fiscal 2025, showing they can drive profit even amid rising material and labor costs.

Steel Connect, Inc. (STCN) How It Makes Money

Steel Connect, Inc. primarily makes money by operating as a global, single-segment supply chain management company through its wholly-owned subsidiary, ModusLink Corporation. They generate revenue by providing complex physical and digital logistics services-everything from product assembly and global distribution to managing customer returns and licensing software for digital product entitlement.

Think of them as the engine room for major technology and consumer electronics companies, handling the heavy lifting of getting a product from the factory floor to the customer's hands, and then managing the entire process if that product is returned. The company's net revenue for the first quarter of fiscal year 2025 (Q1 FY2025, ended October 31, 2024) was $50.5 million, a 22.1% increase from the prior year, driven by higher volumes in key client markets.

Steel Connect, Inc.'s Revenue Breakdown

Since the disposition of the Direct Marketing segment (IWCO Direct) in early 2022, Steel Connect's revenue is now entirely concentrated in its Supply Chain segment, ModusLink. While the company does not publicly break down revenue by service line, the business model clearly divides into core physical logistics and higher-value, specialized services.

The core revenue driver, Physical Logistics & Fulfillment, includes the high-volume, global services like product configuration, kitting, warehousing, and distribution. The Q1 FY2025 revenue surge was specifically attributed to a favorable sales mix and higher volumes in the computing and consumer electronics markets, suggesting this stream is currently the primary growth engine.

The Aftermarket & Digital Services stream captures the higher-margin work: reverse logistics (returns, repair, and recovery), which is a growing market trend, plus the licensing of their proprietary Poetic software for digital entitlement management. This provides a crucial layer of sticky, recurring revenue.

Business Economics

The economics of Steel Connect's business are centered on scale, global footprint, and a shift toward higher-margin, value-added services. It's a low-margin, high-volume industry, but the company is successfully extracting better profitability. Here's the quick math on their current operational efficiency:

• Gross Profit Margin: The margin jumped to 34.1% in Q1 FY2025, a significant improvement from 27.8% in the prior year. This signals better pricing power and efficient cost management, defintely a positive sign.
• Cost Management: Despite a $3.4 million rise in the cost of revenue due to increased material procurement and labor, the gross profit improved by $5.8 million, showing that the higher revenue volumes are outpacing cost inflation.
• Client Concentration: A substantial portion of their revenue comes from a small number of key clients in the technology sector. This is a double-edged sword: it provides scale but makes the business highly sensitive to the loss of a major contract.

The business model relies on outsourcing trends in the supply chain industry, which remains strong. The company's global network of over 20 sites across North America, Europe, and Asia is a major competitive advantage, allowing them to offer end-to-end solutions to large multinational clients.

Steel Connect, Inc.'s Financial Performance

The financial health of Steel Connect, Inc. as of Q1 FY2025 is characterized by strong operational performance but a complex near-term corporate structure due to the pending merger. Breaking Down Steel Connect, Inc. (STCN) Financial Health: Key Insights for Investors

• Adjusted EBITDA: This metric saw a massive increase of 123.0% to $7.4 million in Q1 FY2025, up from $3.3 million in the prior year period. This is the clearest sign of operational leverage and efficiency gains.
• Net Income: Net income decreased to $2.4 million in Q1 FY2025, a drop from $4.4 million in the prior year. This decline was largely due to unfavorable changes in other gains and losses, net, including interest income, not core operations.
• Liquidity: As of October 31, 2024, the company held a robust cash and cash equivalents position of $233.9 million, providing significant financial flexibility.
• Merger Impact: The most critical near-term financial action is the definitive agreement announced in November 2024 for Steel Partners Holdings L.P. to acquire the remaining shares for $11.45 per share in cash. This transaction, expected to close in the near future, will result in Steel Connect becoming a wholly-owned subsidiary and delisting from NASDAQ, fundamentally changing the investment thesis.

Steel Connect, Inc. (STCN) Market Position & Future Outlook

Steel Connect's market position fundamentally shifted in early 2025 when a short-form merger made it a private, wholly-owned subsidiary of Steel Partners Holdings L.P. This move transitioned the company from a small-cap public entity to a focused operating arm, ModusLink, dedicated to global supply chain and e-commerce solutions. The near-term outlook is no longer driven by quarterly public earnings but by internal operational optimization and strategic integration under its parent company, aiming to capture growth in specialized logistics for high-value technology and consumer electronics markets.

The company's last reported trailing twelve-month (TTM) net revenue, as of the first quarter of fiscal year 2025 (ended October 31, 2024), was approximately $183.26 million. This small scale in the vast logistics sector gives it agility, but also means it operates in a highly competitive, fragmented niche. You need to understand that this privatization is the single biggest factor shaping its future, allowing the management to prioritize long-term strategic growth over short-term market pressures. You can read more about the core strategy here: Mission Statement, Vision, & Core Values of Steel Connect, Inc. (STCN).

Competitive Landscape

Steel Connect, primarily through its ModusLink segment, competes in the specialized, end-to-end supply chain and e-commerce logistics market. Relative to massive global players, its market share is fractional, focusing instead on high-touch, complex services for technology and medical device clients.

Opportunities & Challenges

The strategic move to private ownership is designed to unlock specific opportunities, particularly operational efficiency and the use of financial assets. Still, the company faces industry-wide and internal risks.

Industry Position

Steel Connect operates as a niche, integrated provider within the massive global supply chain management market, which is projected to reach $48.59 billion by 2030 with an 11.4% CAGR from 2025 to 2030. Its strength isn't scale, but specialization.

• Focus on high-value products: The company excels in complex logistics for technology, like managing the transition of semiconductor components and providing after-sales services for medical devices.
• Geographic Footprint: Maintains a network of over 20 integrated sites across North America, Europe, and Asia, which is a key differentiator against smaller regional competitors.
• Strategic Shift: The privatization allows for a pivot from a holding company structure to a focused, long-term operational strategy without the distraction of public market scrutiny on its relatively low revenue base.

The company is positioned to benefit from the growing e-commerce logistics market, which is expected to reach an industry size of $650.2 billion in 2025, by leveraging its end-to-end service model, from e-commerce fulfillment to complex returns management (reverse logistics).

Next Step: Strategy Team: Model the projected cost savings and DTA utilization under Steel Partners Holdings for the next three fiscal years.