On Thursday, Worthington Steel, Inc. (NYSE:WS) disclosed an agreement to acquire Kloeckner & Co.
The company plans a voluntary public offer to acquire all outstanding shares of Kloeckner & Co at 11 euros per share ($12.8), with management support and the existing leadership expected to remain post-closing.
SWOCTEM GmbH, Kloeckner’s largest shareholder with 42%, has committed to tender its shares.
The offer requires at least 65% shareholder acceptance and regulatory approval, with completion targeted for the second half of 2026.
Monetary Details
The business combination agreement implies an enterprise value of $2.4 billion.
The deal equates to an EV/EBITDA multiple of roughly 8.5x based on Kloeckner’s trailing EBITDA as of September 30, 2025, or about 5.5x when including expected annual synergies.
Worthington Steel plans to fund the acquisition using cash on hand and new debt, with the offer fully backed by underwritten commitments and no financing conditions.
At closing, pro forma net leverage is expected to be around 4.0x, including synergies.
The company’s immediate focus will be on deleveraging and capturing synergies, aiming to reduce net leverage below 2.5x within 24 months of closing.
Merged Company & Synergies
Kloeckner offers a broad range of products, including carbon flat-roll steel, electrical steel, aluminum, stainless steel, and long products.
The agreement will create North America’s second-largest steel service center, with combined revenues over $9.5 billion.
This complementary combination enhances Worthington Steel’s position in key products and regions while broadening its product range, end markets, and geographic presence across North America and Europe.
The transaction is expected to deliver around $150 million in annual run-rate synergies and significantly boost earnings per share in the first full year after closing.
Also, Worthington Steel expects to achieve commercial synergies, mainly in North America, with full realization targeted by the end of its fiscal year 2028.
Management Commentary
Worthington Steel president and CEO Geoff Gilmore said, “Through the acquisition of Kloeckner & Co., we will enhance our offerings in high-value metals processing and create meaningful value for our shareholders, deeper relationships with our customers and suppliers, and growth opportunities for our employees.”
“Worthington Steel and Kloeckner share a focus on operational excellence, innovation and disciplined execution. By integrating Kloeckner’s capabilities in North America and Europe, we will be stronger together, building a more resilient business and driving shareholder value.”
As of November 30, 2025, Worthington Steel had debt of $182.1 million and cash and cash equivalents of $89.8 million.
WS Price Action: Worthington Steel shares were up 1.29% at $39.25 during premarket trading on Friday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
Photo via Shutterstock
