Worthington Steel Acquires Kloeckner & Co, Creating 2nd Largest NA Steel Service Center Company

By Chris Stiles • Friday, January 23 03:34 • Permanent Link

Worthington Steel (NYSE: WS) has just announced its acquisition of Kloeckner & Co, a leading service center and metal processing company with approximately 110 locations across North America and Europe. This acquisition will create the second-largest steel service center company in North America with over $9.5 billion of combined revenue.

The acquisition is anticipated to generate an estimated $150 million of highly actionable, identified annual run-rate synergies and is expected to be substantially accretive to Worthington Steel’s earnings per share within the first full year of operation.

Worthington Steel has identified approximately $150 million in anticipated annual cost, operational, and commercial process synergies primarily in North America. The transaction is expected to triple Worthington Steel’s scale in terms of sales, representing approximately $9.5 billion of combined revenue while maintaining margins above 7%, including synergies.

The offer price implies an enterprise value of $2.4 billion and represents EV/EBITDA multiples of approximately 8.5x based on Kloeckner’s TTM EBITDA as of September 30, 2025, and 5.5x considering anticipated run-rate synergies of $150 million.

Worthington Steel expects to finance the transaction via a combination of cash on hand and new debt financing. The offer will be fully financed via underwritten commitments and is not subject to any financing conditions. At closing, Worthington Steel anticipates pro forma net leverage to be in the ~4.0x range including synergies, with a goal to reach net leverage levels below 2.5x within 24 months after closing.

The transaction is expected to be completed in the second half of calendar year 2026. Worthington Steel will hold a dedicated conference call for analysts and investors on January 16, 2026, at 8:30 a.m. ET to discuss the proposed acquisition of Kloeckner & Co. The market has reacted to these announcements by moving the company's shares 3.38% to a price of $40.06. For the full picture, make sure to review Worthington Steel's 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.