Russel Metals Announces Execution of Apex Distribution Agreement
10/26/2012 - Ontario-based Russel Metals has entered into an agreement to acquire Canadian oilfield supply company Apex Distribution. Apex will complement Russel's existing energy tubular products segment and provide a new channel of distribution into the Western Canadian market, the company says.
Russel Metals Inc. has entered into an agreement to acquire Apex Distribution Inc. and related companies. The acquisition is expected to close in November 2012.
The total purchase price will include a cash payment to shareholders, debt reduction and a five year earnout. The $225 million cash payment at closing will consist of approximately $175 million to shareholders and approximately $50 million to extinguish Apex Distribution’s net debt. The earnout will be paid over five years based on earnings before interest and taxes and return on net assets.
Apex Distribution is a leading Canadian oilfield supply company servicing the energy segment in Western Canada. Apex Distribution’s annual revenues for its fiscal year ended 30 April 2012 were approximately $500 million and its earnings before interest and taxes were approximately $42 million. Apex Distribution will continue to operate as a standalone unit led by Don White, its current President and CEO.
Brian Hedges, President and CEO of Russel Metals and Don White, President and CEO of Apex Distribution stated "We are extremely excited to have reached an agreement between our companies and we believe the combination provides considerable upside potential for both companies. Apex Distribution complements Russel Metals’ existing energy tubular products segment and provides a new channel of distribution into the Western Canadian oil and gas industry and the Saskatchewan potash market, along with immediate growth opportunities in the U.S. market through Apex Remington, a growing oilfield distribution operation in the U.S."
Russel Metals, headquartered in Mississauga, Ontario, is one of the largest metals distribution companies in North America. It carries on business in three metals distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Alberta Industrial Metals, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Mégantic Métal, Métaux Russel, Métaux Russel Produits Spécialisés, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Siemens Laserworks, Spartan Energy Tubulars, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
