Russel Metals Inc. (TSX: RUS) announces that it has entered into an agreement to acquire seven service center locations from Kloeckner Metals Corporation ("Kloeckner") for approximately US$118.6 million, subject to closing working capital and other normal course adjustments. The acquisition includes the working capital, real estate, buildings and equipment, along with the operating personnel for the seven locations. The purchase price is based on the net book value of the working capital which was approximately $67.1 million at June 30, 2025, plus $51.5 million for the property, plant and equipment.
Russel will acquire Kloeckner's metals service centers in Dubuque (Iowa), Charlotte (North Carolina), Suwanee (Georgia), Houston (Texas), Austin (Texas), Jacksonville (Florida) and Pompano Beach (Florida). For the period between January 1, 2023 and June 30, 2025, the seven service centers generated average annual revenues of approximately US$500 million and average annual adjusted EBITDA1 of approximately US$20 million.
John Reid, President and CEO of Russel Metals commented, "The acquisition of these seven locations is a complementary fit with our existing US locations, as they will tie into our footprint in key regions of Florida/Georgia, Texas, the Carolinas and Iowa/Wisconsin. In addition, this transaction is a continuation of our long-term growth strategy in the US. Upon completion of this transaction, our revenue base will be more than 50% in the US, as compared to 30% in 2019 and 39% in 2024. We look forward to having approximately 350 Kloeckner employees join the Russel team.
We believe this acquisition will provide operating benefits through enhanced inventory management, procurement, and re-investments in facility modernizations and value-added equipment. These initiatives are expected to be implemented over a 2-3 year period."
The transaction will be financed from our cash on hand or drawings under our existing credit facility, which totaled $566 million on June 30, 2025. The transaction is subject to customary closing conditions and is expected to close in Q4'25 or Q1'26.
