Russel to acquire service centres for $118.6M (U.S.)

Mr. John Reid reports RUSSEL METALS TO ACQUIRE SEVEN SERVICE CENTERS IN THE US FROM KLOECKNER Russel Metals Inc. has entered into an agreement to acquire seven service centre locations from Kloeckner Metals Corp. for approximately $118.6-million (U.S.), 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 metal service centres in Dubuque (Iowa), Charlotte (North Carolina), Suwanee (Georgia), Houston (Texas), Austin (Texas), Jacksonville (Florida) and Pompano Beach (Florida). For the period between Jan. 1, 2023, and June 30, 2025, the seven service centres generated average annual revenues of approximately $500-million (U.S.) and average annual adjusted EBITDA (1) of approximately $20-million (U.S.). John Reid, president and chief executive officer of Russel Metals, commented: "The acquisition of these seven locations is a complementary fit with our existing U.S. 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 U.S. Upon completion of this transaction, our revenue base will be more than 50 per cent in the U.S. as compared to 30 per cent in 2019 and 39 per cent 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 reinvestments in facility modernizations and value-added equipment. These initiatives are expected to be implemented over a two- to three-year period." The transaction will be financed from the company's cash on hand or drawings under its existing credit facility, which totalled $566-million on June 30, 2025. The transaction is subject to customary closing conditions and is expected to close in fourth quarter 2025 or first quarter 2026. Additional supplemental financial information related to this announcement will be available in the company's investor conference call section on the company's website. Investor conference call The company will be holding an investor conference call on Sept. 29, 2025, at 9 a.m. ET, to discuss the transaction. The dial-in telephone numbers for the call are 1-647-932-3411 (Toronto and international callers) and 1-800-715-9871 (United States and Canada). Please dial in 10 minutes prior to the call to ensure that you get a line. A replay of the call will be available at 1-647-362-9199 (Toronto and international callers) and 1-800-770-2030 (U.S. and Canada) until midnight on Oct. 13, 2025. You will be required to enter passcode 5021920 followed by the number sign to access the call. (1) Represents earnings before the seller's corporate allocations/charges (that would not be recurring under Russel), interest, income taxes, depreciation and amortization. About Russel Metals Inc. Russel Metals is one of the largest metal distribution companies in North America with a growing focus on value-added processing. It carries on business in three segments: metal service centres, energy field stores and steel distributors. Its network of metal service centres 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 distributor operations act as master distributors selling steel in large volumes to other steel service centres and large equipment manufacturers mainly on an as-is basis. We seek Safe Harbor.