City Pipe & Supply supplies pipe, valves, and fittings to oil and gas companies in the Permian, Eagle Ford, Granite Wash, Barnett and Haynesville basins which collectively represent approximately 60% of the active rigs in the United States
Image: Russel Metals to acquire City Pipe & Supply. Photo: Courtesy of PublicDomainPictures/Pixabay
Russel Metals announced today that it has entered into a stock purchase agreement to acquire all the outstanding shares of City Pipe & Supply Corp. for approximately $160 million. City Pipe & Supply’s revenues were approximately $275 million during its last fiscal year.
Founded in 1942, City Pipe & Supply is an industry leader in supplying pipe, valves, and fittings to oil and gas companies in the Permian, Eagle Ford, Granite Wash, Barnett and Haynesville basins which collectively represent approximately 60% of the active rigs in the United States. City Pipe & Supply operates five distribution centers located in Odessa, Big Spring, Weatherford and Longview, Texas and Hobbs, New Mexico. The current management team will remain in place and Brett Lossin will continue to serve as President.
John Reid, President and Chief Executive Officer of Russel Metals stated, “We are extremely pleased to have entered into this agreement. City Pipe & Supply is both a strategic and cultural fit that affords us the opportunity to further expand our high-margin oilfield services business in the Permian basin. Brett Lossin and the City team have an outstanding reputation and their existing footprint complements our Apex Remington operation. This transaction will be accretive to our earnings.”
Brett Lossin, President of City Pipe & Supply stated “We are very excited to announce that we have entered into this agreement with Russel Metals. We believe that Russel will provide us with the platform for future growth benefiting both our employees and customers.”
The transaction will be financed by the cash held within the U.S. of approximately $100 million and the remainder from our bank facility. The transaction is subject to regulatory approval and customary closing conditions. It is expected to close in the fourth quarter of 2019.
Source: Company Press Release