Olympic Steel Acquires Central Tube & Bar

Rhea-AI Summary

Olympic Steel Inc. completes acquisition of Central Tube & Bar, expected to be immediately accretive. CTB's trailing 12-month revenue is approximately $40 million. Olympic Steel's total debt is $234 million with availability of $359 million, leaving capital for further acquisitions and investments.

Positive

• Acquisition expected to be immediately accretive
• CTB's trailing 12-month revenue is approximately $40 million
• Significant capital available for further acquisitions and investments

Negative

• None.

Company completes seventh acquisition in the past six years. Transaction marks the Company’s latest pipe and tube segment expansion, continuing its growth into products and services with higher-margin returns.

CLEVELAND--(BUSINESS WIRE)-- Olympic Steel Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced that it has acquired Central Tube & Bar (CTB). The all-cash purchase is expected to be immediately accretive. Terms were not disclosed.

CTB was founded in 1996 and serves large original equipment manufacturers (OEMs) and fabricators across the Mid-South from three facilities in Conway, Arkansas, and Tulsa, Oklahoma, totaling 162,000 square feet of warehouse and production space. The business offers a range of value-added fabrication services, including tube laser cutting, tube bending, robotic welding, flat laser burning and brake press forming. CTB’s trailing 12-month revenue for the period ended August 31, 2023, approximated $40 million.

CTB services the transportation, agricultural, commercial furniture and data center construction industries with fabricated tube and bar products, including round, square, rectangular and special shaped tubes. The business will continue to operate as Central Tube & Bar, an Olympic Steel Company, led by Dustin Ward, President, and his experienced management team.

“The acquisition of Central Tube & Bar represents our latest strategic move to invest in consistently high-performing businesses. We are delighted to welcome Dustin Ward and his capable team to the Olympic Steel family,” said Richard T. Marabito, Chief Executive Officer. “Olympic Steel’s tubular and pipe products segment has historically been our highest EBITDA-to-sales margin segment, and CTB’s historical financial performance has consistently exceeded our tubular and pipe products returns. CTB is a well-run, growing organization, and a great cultural fit for Olympic Steel.”

“In addition to expanding our geographic reach into the high-growth markets in the Mid-South, Central Tube & Bar extends our value-added contract manufacturing capabilities,” said Andrew Greiff, President and Chief Operating Officer. “The addition of CTB into our tubular and pipe products segment, combined with the existing success of our Chicago Tube & Iron business, provides great opportunities for growth and synergies.”

Central Tube & Bar will be included in Olympic Steel’s tubular and pipe products segment, led by William Zielinski, President – Chicago Tube & Iron.

Following the acquisition of CTB, Olympic Steel's total debt under its revolving credit facility is approximately $234 million, with availability of approximately $359 million, leaving significant capital to continue its diversification strategy through investments in additional acquisitions, new capacity and increased efficiency through automation to deliver shareholder value.

Forward-Looking Statements

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as "may," "will," "anticipate," "should," "intend," "expect," "believe," "estimate," "project," "plan," "potential," and "continue," as well as the negative of these terms or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to successfully integrate CTB into our business and risks inherent with the CTB acquisition in the achievement of expected results, including whether the acquisition will be accretive and within the expected time frame, and our ability to successfully execute our diversification strategy. We undertake no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2022, and in our reports on Forms 10-Q and 8-K.

About Olympic Steel

Founded in 1954, Olympic Steel is a leading U.S. metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate, and coil products; stainless steel sheet, plate, bar and coil; aluminum sheet, plate and coil; pipe, tube, valves and fittings; and tin plate. The Company was founded in 1954 and operates from 47 locations across North America.

For additional information, please visit the Company’s website at www.olysteel.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230929641726/en/

Richard A. Manson

Chief Financial Officer

(216) 672-0522

ir@olysteel.com

Source: Olympic Steel, Inc.