Strengthens Worthington Steel’s leadership position in the North American metal processing sector
Highlights:
- Creates the second largest steel service center company in North America with over $9.5 billion of combined revenue
- Highly complementary combination that strengthens Worthington Steel’s strategic offerings in key product categories and regions
- Further diversifies Worthington Steel’s products, end markets and geographic footprint across North America and Europe
- Anticipated to generate an estimated $150 million of highly actionable, identified annual run-rate synergies
- Expected to be substantially accretive to Worthington Steel’s EPS within the first full year of operation
- Provides a platform with multiple avenues for accelerated further growth
- All-cash acquisition to be implemented via a Voluntary Tender Offer in Germany
- Transaction supported by SWOCTEM GmbH, Kloeckner’s major shareholder
Worthington Steel (NYSE: WS), today announced that it has entered into a Business Combination Agreement with Kloeckner & Co.
Listed in Germany (XETR: KCO), Kloeckner & Co is a leading service center and metal processing company with approximately 110 locations across North America and Europe. It has broad product capabilities including carbon flat-roll steel (sheet and plate), electrical steel, aluminum, stainless steel and long products. Over the past few years, Kloeckner has been transitioning toward high value-added processing and fabrication via M&A and strategic growth initiatives.
The proposed acquisition represents a strong strategic fit and advances Worthington Steel’s growth strategy by strengthening its position in the North American metal processing sector.
It will create a larger and more diversified metals processing leader with an enhanced product offering and broader geographic reach. Once completed, the transaction will position Worthington Steel as the second largest steel service center company in North America by revenue.
The transaction broadens Worthington Steel’s product portfolio, end market exposure and geographic footprint. The combined company will benefit from greater scale, shared best practices and operational efficiency. Together, Worthington Steel and Kloeckner & Co will build upon their shared focus on safety, quality and operational excellence.
“This is a strategic and transformative step in Worthington Steel’s growth journey,” said Worthington Steel president and CEO Geoff Gilmore. “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.”
“This transaction is the right step for Kloeckner & Co as we continue to build on our strengths and position our business for the future,” said Guido Kerkhoff, CEO of Kloeckner & Co. “Worthington Steel brings complementary capabilities, a highly respected reputation and an experienced leadership team that shares our focus on operational excellence and strategic growth. The combination of both companies offers compelling value to all our stakeholders, and we are excited that Kloeckner will be even better positioned to execute our strategic plan, serve our customers and support the long-term success of our people.”
Attractive Transaction Economics
Worthington Steel has identified approximately $150 million in anticipated annual cost, operational, and commercial process synergies primarily in North America. Synergies are expected to be fully realized by the end of Worthington Steel’s fiscal year 2028.
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 multiples1 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.
Furthermore, the acquisition is expected to be substantially accretive to Worthington Steel’s earnings per share within the first full year of operation.
Transaction Execution
Worthington Steel GmbH, the subsidiary established for the acquisition, intends to launch a voluntary public offer to acquire all outstanding shares of Kloeckner & Co. Kloeckner shareholders who choose to participate in the offer will receive €11 in cash for each Kloeckner & Co share tendered into the offer. Kloeckner’s Management and Supervisory board welcome the Offer and, subject to their review of the Offer Document, intend to recommend acceptance by Kloeckner’s shareholders. The Management Board and executive leadership are expected to remain in place following completion of the transaction.
SWOCTEM GmbH, Kloeckner’s largest shareholder, owning approximately 42% of shares, has entered into an Irrevocable Agreement with Worthington Steel whereby they have committed to tender their shares in support of Worthington Steel’s offer.
Completion of the offer will be subject to a minimum acceptance threshold of 65% of Kloeckner’s issued share capital at the end of the acceptance period and regulatory approvals. Completion of the offer is expected to occur in the second half of calendar year 2026. Further details of the voluntary tender offer will be set forth in an Offer Document in accordance with German securities laws.
The Offer Document will be submitted to the German Federal Financial Supervisory Authority (BaFin) for approval. Following BaFin approval, the Offer Document and all further information regarding the Offer will be published in accordance with the German Securities Acquisition and Takeover Act at www.strong-for-good.com.
Financing and Capital structure
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. Worthington Steel’s immediate post-transaction focus will center on deleveraging and synergy capture. Worthington Steel’s goal is to reach net leverage levels below 2.5x within 24 months after closing.
Worthington Steel remains committed to its conservative financial approach and balanced capital allocation, with a continued focus on shareholder returns through dividends and disciplined reinvestment.
Advisors and Counsel
Andina Partners International LLP and Bank of America are acting as financial advisors to Worthington Steel. Latham & Watkins LLP is serving as legal counsel to Worthington Steel. Wells Fargo and Citigroup have provided fully underwritten financing commitments for the acquisition financing.
Investor and Analyst Call
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 call will be accessible via webcast at ir.worthingtonsteel.com. A replay of the webcast and the accompanying presentation materials will be available shortly thereafter at the same address.
