Russel Metals To Buy 7 Service Centers From Samuel For Around $225 Mln Cash

Russel Metals Inc. (RUS.TO), a Canadian metals distribution and processing firm, said on Monday that it has inked a deal to acquire seven service center locations from Samuel, Son & Co., Limited., for around $225 million.

The transaction, expected to be closed in the first or second quarter of 2024, will be financed from the company’s cash on hand, which totaled $569 million on September 30, 2023.

The purchase price is based on the net book value of the working capital which was around $186 million as of September 30, 2023, the net book value of the related equipment and machinery for $29 million plus and an additional $10 million.

John Reid, CEO of Russel Metals, said: “In Western Canada, Samuel’s five locations will be a strong fit with our current footprint, including providing new opportunities to benefit from Samuel’s focus on non-ferrous products and Russel’s focus on value-added processing. In the US Northeast, the two locations will provide an eastern extension of our existing operations in the US Mid-West.”

Russel will acquire Samuel’s metals service centers in Winnipeg, Calgary, Nisku, Langley, Surrey, Buffalo, and Pittsburgh.

Samuel will retain its location in Delta, BC and conduct an orderly shut-down of that facility.

For the year ended December 31, 2022, the seven service centers had generated revenues and adjusted EBITDA of $704 million and $33 million, respectively.

For the nine months to September 30, 2023, the business generated revenues and adjusted EBITDA of $457 million and $19 million, respectively.

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