Russel Metals Inc. has entered into an agreement with Marubeni-Itochu Tubulars America Inc. (MITI) to sell its 50% equity interest in TriMark Tubulars Ltd. for approximately $61 million. The transaction is expected to close in the third quarter of 2023, pending regulatory approvals.
TriMark Tubulars Ltd. was formed in July 2021 as a joint venture between Russel Metals and MITI, combining their Canadian OCTG/line pipe businesses. At the time of the formation, Russel Metals had around $141 million in net assets in its Canadian OCTG/line pipe business. With the creation of TriMark, Russel Metals converted $109 million into cash and retained a $32 million equity interest in the company.
Over the past two years, Russel Metals has received $36 million in dividends from TriMark. With the sale of its equity interest to MITI, Russel Metals will achieve a return on investment of over 200%.
This sale represents the final step in Russel Metals’ staged exit from the OCTG/line pipe business. Over the past three years, the company has repatriated approximately $375 million of capital from this business segment and reinvested it in its core segments with higher returns and lower risks.
John Reid, President and CEO of Russel Metals, stated that the company has retained financial flexibility to pursue opportunistic growth and return capital to shareholders.
Russel Metals Inc. is one of the largest metals distribution companies in North America, with a focus on value-added processing. It operates in three segments: metals service centers, energy field stores, and steel distributors, offering a wide range of metal products to various industries.
The statements in this press release are forward-looking and subject to inherent risks and uncertainties. While Russel Metals believes its expectations are reasonable, there is no assurance that they will prove to be correct. The company does not assume any obligation to update its forward-looking statements.
For more information, please visit the Russel Metals Inc. website.