Toronto, Ontario-based metals service center Russel Metal Inc. has announced that it entered into an agreement to acquire Apex Distribution Inc. and related companies. The acquisition is expected to close in November 2012.
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.
Brian Hedges, President and CEO of Russel Metals and Don White, President and CEO of Apex Distribution stated, "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 US market through Apex Remington, a growing oilfield distribution operation in the US."