Russel Metals (RUS) investor relations material

Deal rationale and strategic fit

• Acquisition of seven U.S. service centers expands geographic presence in key regions including Florida, Texas, Georgia, North Carolina, Iowa, the South, and Midwest, complementing existing operations.

• Increases U.S. revenue base to over 50% post-transaction, up from 30% in 2019 and 39% in 2024, supporting long-term growth strategy.

• Strategic fit leverages a hub-and-spoke model, enabling value-added processing and inventory sharing across branches.

• Seller focuses on contractual, high value-add business, while buyer remains transactional, creating complementary channels.

• Adds approximately 350 employees, strengthening operational capabilities.

Financial terms and conditions

• Purchase price is $51.5M for PP&E plus working capital at closing, estimated at $67M, totaling approximately $118.6M–$119M USD, subject to adjustments.

• Transaction will be financed from existing liquidity of $566M as of June 30, 2025, or through cash on hand or credit facility.

• Acquired locations generated average annual revenues of $500M and adjusted EBITDA of $20M–over $20M in the past 2.5 years.

• EBITDA multiple is about 5x average cycle EBITDA.

• All properties, including buildings and equipment, will be owned; no sale-leaseback planned.

Synergies and expected cost savings

• Margin improvement expected through operational efficiencies, procurement, and inventory management.

• Value-added processing to be expanded by leveraging existing capabilities and targeted capital investments over 2-3 years.

• Immediate operational improvements anticipated within 12 months; further gains from incremental investments.

• Integration with existing locations expected to create operational synergies and opportunities for reinvestment.

• No significant capital reduction or facility rationalization expected, unlike previous acquisitions.