Worthington Steel, Inc. (NYSE: WS) made public on Thursday its strategy to acquire Kloeckner & Co. in a deal designed to broaden its product lines and expand its geographical reach. The company is launching a voluntary public tender offer set at 11 euros per share, equivalent to approximately $12.80, to purchase all outstanding shares of Kloeckner & Co. The offer has secured endorsement from Kloeckner’s management team, and leadership continuity is anticipated following the deal’s closure.
A key development in the transaction is the commitment from SWOCTEM GmbH, Kloeckner’s largest shareholder owning 42%, to tender their shares, providing substantial support to the acquisition proposal. Completion of the offer hinges on obtaining the acceptance of not less than 65% of Kloeckner shareholders alongside regulatory approvals, with the closing anticipated during the second half of 2026.
Financially, the business combination corresponds to an enterprise valuation of approximately $2.4 billion. The valuation translates to an enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple near 8.5 times, based on Kloeckner’s trailing EBITDA as of September 30, 2025. Considering the expected annual synergies from the transaction, this multiple effectively decreases to about 5.5 times.
The acquisition funding will be sourced through a mix of Worthington Steel’s available cash reserves and newly arranged debt facilities. The financing arrangement benefits from underwritten commitments, eliminating conditions related to financing contingencies. Post-closing, management projects a pro forma net leverage ratio around 4.0 times, inclusive of synergy effects.
Worthington Steel’s immediate priorities following the acquisition will include reducing leverage and capturing the anticipated synergies. The company targets bringing net leverage below 2.5 times within a two-year window from the closing date, leveraging expected efficiency gains and integration benefits.
Kloeckner & Co. is known for its diverse product portfolio, which includes carbon flat-roll steel, electrical steel, aluminum, stainless steel, and long steel products. The transaction is positioned to create the second-largest steel service center in North America, with combined revenues exceeding $9.5 billion. This complementary merger enhances Worthington Steel’s capabilities and market coverage by broadening its product offerings, penetrating new end markets, and extending its regional influence across both North America and Europe.
Moreover, operational synergies borne from this union are projected to generate approximately $150 million in annual run-rate savings. These efficiencies, alongside the broadened scale and product mix, are set to substantially increase earnings per share starting from the first full fiscal year after transaction close.
Worthington Steel anticipates recognizing commercial synergies primarily in North America, with full realization expected by the end of its fiscal year 2028, marking a phased yet clear path towards unlocking incremental value.
Reflecting on this strategic move, Worthington Steel president and CEO Geoff Gilmore stated, "The acquisition of Kloeckner & Co. represents a significant step forward in expanding our offerings in high-value metal processing. It creates an opportunity to deliver meaningful shareholder value, nurture deeper customer and supplier partnerships, and foster growth prospects for our workforce."
Gilmore further emphasized the cultural and operational alignment between the two companies, citing shared commitments to operational excellence, innovation, and disciplined execution. He expressed confidence that integrating Kloeckner’s capabilities within North America and Europe will fortify the combined entity, building resilience and enhancing shareholder returns.
On a recent financial snapshot dated November 30, 2025, Worthington Steel reported debt obligations totaling $182.1 million against cash and cash equivalents amounting to $89.8 million.
Following the announcement, premarket trading on Friday saw Worthington Steel’s stock rise by 1.29% to $39.25, marking a fresh 52-week high for the shares according to market data services.