Sep 6 2007
Russel Metals Inc. announced today that it has entered into a share purchase agreement to acquire 100% of the outstanding capital stock of JMS Metals Services, Inc. and related companies ("JMS"), an American metals service center.
JMS was founded in July 1990 and is a full-line distributor of steel and aluminium products with eight strategically located processing and distribution facilities in Alabama, Arkansas, Georgia, Kentucky and Tennessee. JMS revenues are expected to be approximately CDN$200 million for the current year ended December 31, 2007. The transaction is expected to close at the end of the third quarter.
Bud Siegel, President and CEO, stated, "The acquisition of JMS provides Russel Metals with a new geographic presence in the USA and a management team that will further grow our U.S. business, both organically and through further acquisitions. We have patiently waited for over four years to find a company such as JMS where we are completely comfortable that the culture and focus is similar to ours and that all parties feel the transition will be seamless in nature."
The total transaction value will be approximately CDN$125 million and will be funded from the $207 million cash balance of Russel Metals as of June 30, 2007. Brian Hedges, Executive Vice President and CFO, stated, "JMS is an excellent addition to our metals service center segment and this immediately accretive investment will continue to strengthen our ability to pay our industry leading dividend."