Russel Metals expands U.S. footprint, acquiring seven Kloeckner service centers for $118.6M

Russel Metals has signed a definitive agreement to acquire seven service centers from Kloeckner Metals Corporation for approximately $118.6 million, including real estate, equipment, and personnel.

The service centers are located in key U.S. markets and have a strong revenue history, generating an average of $500 million annually with projected adjusted EBITDA of $20 million from 2023 to mid-2025.

The acquisition will be financed through Russel Metals' existing credit facilities, and the company expects to realize operational synergies within two to three years post-acquisition.

The deal is anticipated to close either in late 2025 or early 2026.

Recommendation Rating: Strong Buy

Russel Metals (OTCPK:RUSMF) has entered into a definitive agreement to acquire seven service center locations from Kloeckner Metals Corporation for approximately $118.6 million.

This comprehensive transaction includes the acquisition of working capital, real estate, structures, equipment, and operating personnel across all seven facilities.

The service centers being acquired are strategically located in key markets across the United States, specifically: Dubuque (Iowa), Charlotte (North Carolina), Suwanee (Georgia), Houston and Austin (Texas), as well as Jacksonville and Pompano Beach (Florida). These centers have a robust revenue history, averaging $500 million annually, with an adjusted EBITDA of $20 million projected from January 2023 to June 2025.

The acquisition cost is structured based on the net book value of the working capital, which is estimated at $67.1 million as of June 30, 2025. An additional $51.5 million will cover the property, plant, and equipment.

Russel Metals plans to finance this acquisition through its existing credit facilities, which stand at $566 million as of June 30, 2025. The company anticipates that operational enhancements will yield synergies over the next two to three years.

The transaction is expected to close in the fourth quarter of 2025 or the first quarter of 2026.