Russel will acquire Samuel's metals service centers in Winnipeg (Manitoba), Calgary (Alberta), Nisku (Alberta), Langley (BC), Surrey (BC), Buffalo (New York) and Pittsburgh (Pennsylvania).

Russel Metals Inc. announces that it has entered into an agreement to acquire seven service center locations from Samuel, Son & Co., Limited ("Samuel") 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 September 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 centers in Winnipeg (Manitoba), Calgary (Alberta), Nisku (Alberta), Langley (BC), Surrey (BC), Buffalo (New York) and Pittsburgh (Pennsylvania).  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 that are part of the transaction generated revenues and adjusted EBITDA1 of $704 million and $33 million, respectively.  For the nine months ended September 30, 2023, the business generated revenues and adjusted EBITDA1 of $457 million and $19 million, respectively.

John Reid, President and CEO 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 US Northeast, the two locations will provide an eastern extension of our existing operations in the US Mid-West.  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 our cash on hand, which totaled $569 million on September 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 or second quarter of 2024.

Additional supplemental financial information related to this announcement will be available in our investor conference call section on our website at www.russelmetals.com.

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