TORONTO, July 31,
2023 /PRNewswire/ - Russel Metals Inc. (TSX: RUS)
announces that it has entered into an agreement with
Marubeni-Itochu Tubulars America Inc. ("MITI"), whereby Russel
Metals will sell its 50% equity interest in TriMark Tubulars Ltd.
("TriMark") for approximately $61
million, subject to normal course closing adjustments. The
transaction is subject to customary regulatory approvals and is
expected to close in the third quarter of 2023.
TriMark was created in July 2021
when Russel Metals and MITI combined their respective Canadian
OCTG/line pipe businesses. At that time, Russel Metals had
approximately $141 million of net
assets in its Canadian OCTG/line pipe business. With the formation
of Trimark, Russel converted approximately $109 million into cash and retained a
$32 million equity interest in
TriMark. In the past two years, Russel Metals has received
$36 million in dividends from
TriMark, which when combined with the sale of the retained equity
interest to MITI for $61 million will
equate to a return on investment of over 200%.
John Reid, President and CEO of
Russel Metals commented, "This transaction represents the final
step to our staged exit from the OCTG/line pipe business. Over the
past three years, we have repatriated approximately $375 million of capital from the OCTG/line pipe
business and have reinvested in our core segments at superior
returns with lower risk. Additionally, we have retained significant
financial flexibility to opportunistically grow our company and
return capital to our shareholders".
About Russel Metals Inc.
Russel Metals is one of the largest metals distribution
companies in North America with a
growing focus on value-added processing. It carries on business in
three segments: metals service centers, energy field stores and
steel distributors. Its network of metals service centers 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 centers and large equipment manufacturers mainly on an "as
is" basis.
Cautionary Statement on
Forward-Looking Information
Certain statements contained in this press release constitute
forward-looking statements or information within the meaning of
applicable securities laws, including the timing and anticipated
receipt of necessary approvals and satisfaction of conditions to
close the transaction. Forward-looking statements relate to future
events or our future performance. All statements, other than
statements of historical fact, are forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions. Forward-looking statements are
necessarily based on estimates and assumptions that, while
considered reasonable by us, inherently involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements.
While we believe that the expectations reflected in our
forward-looking statements are reasonable, no assurance can be
given that these expectations will prove to be correct, and our
forward-looking statements included in this press release should
not be unduly relied upon. These statements speak only as of the
date of this press release and, except as required by law, we do
not assume any obligation to update our forward-looking
statements.
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Investor Relations Line: 905-816-5178.
Website: www.russelmetals.com
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SOURCE Russel Metals Inc.