Russel Metals Announces the Execution of Apex Distribution Agreement

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 April 30, 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 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.

Statements contained in this press release that relate to the expected closing of the acquisition of Apex Distribution and the growth opportunities are not statements of historical fact and are forward-looking statements. Russel Metals cautions readers there are important factors, risks and uncertainties, including but not limited to economic, competitive and governmental factors affecting Russel Metals' post-acquisition operations, markets, products, services and prices that could cause its actual results, performance or achievements to be materially different from those forecasted or anticipated in such forward-looking statements. The forward-looking statements in this press release reflect management's current beliefs and are based on information currently available to management. The material assumptions applied in making the forward-looking statements in this document include the following: demand from the manufacturing, resource and construction segments of the Canadian economy remains at current levels and these conditions will continue in the foreseeable future; and oil and gas prices, the price of steel and the value of the Canadian dollar relative to the U.S. dollar will be at similar levels with what we experienced during the second quarter of 2012. Although the forward-looking statements contained in this document are based upon what management believes to be reasonable estimates and assumptions, Russel Metals cannot ensure that actual results will not be materially different from those expressed or implied by these forward-looking statements and does not intend to update any forward-looking statement other than required by law.