- Purchase Price of US$79.5
Million
- Complementary Geographic Extension into the Florida
Market
- Significant Value-Added Processing and Non-Ferrous Product
Mix
TORONTO, Nov. 12,
2024 /PRNewswire/ - Russel Metals Inc. (TSX: RUS)
announces that it has entered into an agreement to acquire Tampa
Bay Steel Corporation ("Tampa Bay Steel") for US$79.5 million, subject to normal course
adjustments. The purchase price includes working capital,
buildings and equipment, and the related real estate. Tampa
Bay Steel has a long standing and well-respected management team in
the central Florida region, and
its business includes significant value-added processing and
non-ferrous products.
John Reid, President and CEO of
Russel Metals commented, "Our approach to acquisitions is to focus
on opportunities that are complementary from a product mix and
geographic perspective, but also aligned with our performance-based
and decentralized culture. We believe that the
transaction is a strong fit as it will allow us to extend our
footprint into the Florida market
with an experienced management team and a culture that is aligned
with ours. In addition, Tampa Bay Steel has invested
approximately US$20 million in
value-added equipment and facility expansion over the past three
years, and has a platform for further growth within the
Florida market. We look
forward to having the Tampa Bay Steel employees join the Russel
family."
Tampa Bay Steel generated average annual revenues and adjusted
EBITDA1 of approximately US$115
million and US$13 million,
respectively, over the past five years. The transaction will
be financed from our cash on hand or drawings under our credit
facility and is expected to close in December 2024.
|
1 Non
GAAP measure that represents earnings before non-recurring items,
interest, income taxes, depreciation and amortization.
|
About Russel Metals Inc.
Russel Metals is one
of the largest metals distribution companies in North America with a growing focus on
value-added processing. It carries on business in three
segments: metals service centers, energy field stores and steel
distributors. Its network of metals service centers carries
an extensive line of metal products in a wide range of sizes,
shapes and specifications, including carbon hot rolled and cold
finished steel, pipe and tubular products, stainless steel,
aluminum and other non-ferrous specialty metals. Its energy
field stores carry a specialized product line focused on the needs
of energy industry customers. Its steel distributors
operations act as master distributors selling steel in large
volumes to other steel service centers and large equipment
manufacturers mainly on an "as is" basis.
Cautionary Statement on Forward-Looking
Information
Certain statements contained in this press
release constitute forward-looking statements or information within
the meaning of applicable securities laws relating to, among other
things, the anticipated benefits of the transaction, the timing to
close the transaction and there can be no assurance that the
proposed transaction will occur, or that it will occur on the exact
terms contemplated in this press release. Forward-looking
statements are often, but not always, identified by the use of
words such as "expect", "may", "will", "could", "might", "should",
"believe" and similar expressions. Forward-looking statements
are necessarily based on estimates and assumptions that, while
considered reasonable by us, inherently involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements.
While we believe that the expectations reflected in our
forward-looking statements are reasonable, no assurance can be
given that these expectations will prove to be correct, and our
forward-looking statements included in this press release should
not be unduly relied upon. These statements speak only as of
the date of this press release and, except as required by law, we
do not assume any obligation to update our forward-looking
statements.
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by calling our Investor Relations Line: 905-816-5178.
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SOURCE Russel Metals Inc.