Fort Smith-based Boyd Metals is being acquired by Toronto, Canada-based Russel Metals in a $110 million deal. Russel Metals, a publicly held company (TSX: RUS) traded on the Toronto Stock Exchange, said the deal is expected to close in the fourth quarter of 2021.
Boyd Metals, a steel service center, was founded in Fort Smith in 1991 by Chester Koprovic, Tom Kennon and Ron Tabor. The company now reports more than 250 employees with five stocking warehouse and sales office locations in Joplin, Mo., Oklahoma City, Fort Smith, Tyler, Texas, and Little Rock. Koprovic is an investor in Natural State Media, the corporate parent of Talk Business & Politics.
“We believe their (Boyd) culture, experienced management team and business platforms are very much aligned with our existing business as we look to further expand our U.S. service center footprint. We look forward to having all of the Boyd employees as part of the Russel family,” noted John Reid, president and CEO of Russel, in Thursday’s (Nov. 4) release posted after the markets closed.
Kennon, president and CEO of Boyd Metals, told Talk Business & Politics that talks began about two years ago with Russel but were halted in March 2020 because of the COVID-19 pandemic. Those talks began again in late 2020, with a final push beginning in June. Kennon also said the Boyd Metals name will remain and the five operating companies within Boyd Metals will continue to operate as they have. He said they were interested only in a deal in that preserved the operation, including the jobs for employees.
“I’ve known the guy (Russel President and CEO John Reid) for about 30 years and we have the same philosophy. … But we’re not changing. It will be business as usual for us. That’s what we were looking for so we could have a continuing legacy for Boyd Metals in the Fort Smith area and all of our locations,” Kennon said.
Russel Metals, one of the largest metals distribution companies in North America, primarily distributes steel products with most of its business in metals service centers, energy industry products, and steel distributors. The company has been on a buying spree since the mid-1990s, acquiring at least 20 pipe and other steel product makers and distributors in that time. Businesses owned by Russel include JMS Metals in Blytheville, Jonesboro, and Texarkana, Texas.
According to the Russel press release, Boyd Metals posted revenue of $244 million during the 12 months ended Sept. 30, with earnings before interest, taxes, depreciation and amortization of $39 million. Russel recorded $2.688 billion (Canadian) in revenue in 2020, below the $3.675 billion in 2019. Net income in 2020 was $24.5 million (Canadian), below the $76.6 million in 2019.
Russel said the deal will be financed from the company’s cash on hand and/or through its existing bank facility. As of Sept. 30, Russel reported $337 million of cash and “substantial availability under its bank facility.”