Russel Metals Inc. has entered into an agreement with Kloeckner Metals Corporation (“Kloeckner”). Under the agreement, Russel will acquire seven service center locations for approximately US$118.6 million. This is 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.
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.
According to the company, the acquisition of the seven locations is a complementary fit with its existing U.S. locations. It ties into its footprint in Florida/Georgia, Texas, the Carolinas, and Iowa/Wisconsin. This continues Russel’s long-term growth strategy in the U.S. The company believes 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.
Courtesy of Russel Metals.