Mr. John Reid reports

RUSSEL METALS TO ACQUIRE SEVEN SERVICE CENTERS IN WESTERN CANADA AND THE US NE FROM SAMUEL, SON & CO., LIMITED

Russel Metals Inc. has entered into an agreement to acquire seven service centre locations from Samuel, Son & Co. Ltd. for approximately $225-million, subject to closing working capital and other normal course adjustments. The purchase price is based on the net book value of the working capital, which was approximately $186-million at Sept. 30, 2023, plus the net book value of the related equipment and machinery for $29-million plus an additional $10-million.

Russel will acquire Samuel's metals service centres in Winnipeg, Man., Calgary, Alta., Nisku, Alta., Langley, B.C., Surrey, B.C., Buffalo, N.Y., and Pittsburgh, Penn. Samuel will retain its location in Delta, B.C., and conduct an orderly shutdown of that facility. For the year ended Dec. 31, 2022, the seven service centres that are part of the transaction generated revenues and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $704-million and $33-million, respectively. For the nine months ended Sept. 30, 2023, the business generated revenues and adjusted EBITDA of $457-million and $19-million, respectively.

John Reid, president and chief executive officer of Russel Metals, commented: "Over the past several years, we've reviewed a significant number of potential acquisition opportunities and are excited to announce this transaction, as our respective businesses are very complementary from both geographic and product mix perspectives. We look forward to having the approximately 340 Samuel employees join the Russel family.

"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 U.S. Northeast, the two locations will provide an eastern extension of our existing operations in the U.S. Midwest. In addition, we believe there will be opportunities to achieve operating efficiencies by more effectively managing the combined footprint, including enhanced inventory management, procurement, location integration/rationalization and systems. These reorganization initiatives are expected to be implemented over a two-year period."

The transaction will be financed from Russel's cash on hand, which totalled $569-million on Sept. 30, 2023. The transaction is subject to Canadian regulatory clearance as well as other customary closing conditions and is expected to close in the first quarter or second quarter of 2024.

Additional supplemental financial information related to this announcement will be available in the investor conference call section on Russel's website.

Investor conference call

The company will be holding an investor conference call on Monday, Dec. 4, 2023, at 9 a.m. ET, to discuss the transaction. The dial-in telephone numbers for the call are 416-764-8688 (Toronto and international callers) and 1-888-390-0546 (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 416-764-8677 (Toronto and international callers) and 1-888-390-0541 (United States and Canada) until midnight, Monday, Dec. 18, 2023. You will be required to enter passcode 833981 followed by the number sign to access the call.

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: metals service centres, energy field stores and steel distributors. Its network of metals 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 distributors 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.

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