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Russel Metals buys oilfield supplier

Dec 03, 2013 | 04:34 PM |

Tags  Russel Metals, Monarch Supply, oilfield supply services, Don White, Apex Distribution, Brian Hedges, Corinna Petry

CHICAGO — Russel Metals Inc. has closed its acquisition of Monarch Supply Ltd., an oilfield supply company predominantly servicing the Drayton Valley, Alberta, area.

Monarch Supply has annual revenue of about Canadian $50 million ($47 million) and earnings before interest and taxes (Ebit) of some C$8 million ($7.5 million), Russel said Dec. 2.

The purchase price includes cash consideration of C$33 million ($31 million) plus a five-year earnout to be paid based on future Ebit and return on net assets.

Monarch Supply will report to Don White, president and chief executive officer of Russel’s Apex Distribution subsidiary. Monarch’s existing management and employees will continue to run Monarch Supply’s daily operation.

"Apex Distribution has benefited from a longtime working relationship with Monarch Supply. There is an excellent fit between the product offerings, customer base and distribution capabilities of the two companies," White said in a statement.

"The addition of Monarch Supply cements a long-standing relationship between (the two companies) and provides further growth for our business in the oilfield products market," Russel Metals president and chief executive officer Brian R. Hedges said. "We are also investing in greenfield locations through Apex Remington in the active shale plays in the United States, which will provide further growth opportunities for our energy segment."

Mississauga, Ontario-based Russel Metals’ other energy market-targeted subsidiaries include Comco Pipe & Supply Co., Fedmet Tubulars, Pioneer Steel & Tube Corp., Spartan Steel Products Inc. and Triumph Tubular & Supply Ltd.

Russel executives signaled in a Nov. 8 earnings call that the company would close one more acquisition this year (, Nov. 8).

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