Toronto-based Russel Metals Inc. has entered into a stock purchase agreement to acquire all the outstanding shares of City Pipe & Supply Corp. for approximately $160 million.
“City Pipe & Supply is both a strategic and cultural fit that affords us the opportunity to further expand our high-margin oilfield services business in the Permian basin,” says John Reid, president and CEO of Russel Metals. “Brett Lossin and the City team have an outstanding reputation and their existing footprint complements our Apex Remington operation.”
City Pipe & Supply’s revenues were approximately $275 million during its last fiscal year.
“We are very excited to announce that we have entered into this agreement with Russel Metals,” says Brett Lossin, president of City Pipe & Supply. “We believe that Russel will provide us with the platform for future growth benefiting both our employees and customers.”
Founded in 1942, City Pipe & Supply is an industry leader in supplying pipe, valves, and fittings to oil and gas companies in the Permian, Eagle Ford, Granite Wash, Barnett and Haynesville basins which collectively represent approximately 60 per cent of the active rigs in the United States.
City Pipe & Supply operates five distribution centres located in Odessa, Big Spring, Weatherford and Longview, Texas and Hobbs, N.M.
The current management team will remain in place and Brett Lossin will continue to serve as president.
The transaction will be financed by the cash held within the U.S. of approximately $100 million and the remainder from our bank facility. The transaction is subject to regulatory approval and customary closing conditions. It is expected to close in the fourth quarter of 2019.
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three metals distribution segments: metals service centres, energy products and steel distributors.
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