Olympic Steel (ZEUS) Expands in Mid-South with CTB Acquisition
Olympic Steel Inc. ZEUS, a prominent national metals service center, announced its acquisition of Central Tube & Bar (CTB) in an all-cash deal. The purchase is expected to yield immediate positive financial results, although specific transaction terms have not been disclosed.
CTB, established in 1996, operates across the Mid-South region with three facilities in Conway, AR, and Tulsa, OK. These facilities collectively encompass 162,000 square feet of warehouse and production space. CTB offers value-added fabrication services, including tube laser cutting, tube bending, robotic welding, flat laser burning, and brake press forming. In the trailing 12-month period ending Aug 31, 2023, CTB reported approximately $40 million in revenues.
The core customer base of CTB includes large OEMs and fabricators in industries such as transportation, agriculture, commercial furniture, and data center construction. Its product range encompasses round, square, rectangular, and custom-shaped tubes. It will continue to operate independently as Central Tube & Bar, now under the umbrella of Olympic Steel, with Dustin Ward remaining as President, along with the existing management team.
Olympic Steel’s shares have gained 114% in a year against a 44.2% rise of the industry.
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The acquisition of CTB marks the company's most recent strategic endeavor to invest in consistently high-performing enterprises. Historically, Olympic Steel's tubular and pipe products segment has consistently boasted the highest EBITDA-to-sales margin. CTB's financial track record has consistently outperformed returns from tubular and pipe products.
This acquisition expands the company's footprint into the burgeoning markets of the Mid-South and enhances its capabilities in value-added contract manufacturing. The integration of CTB into the tubular and pipe products segment, in conjunction with the existing success of the Chicago Tube & Iron business, opens up substantial opportunities for growth and synergies.
Central Tube & Bar will be integrated into Olympic Steel’s tubular and pipe products segment, led by William Zielinski, President of Chicago Tube & Iron.
Following the acquisition of CTB, Olympic Steel's total debt under its revolving credit facility stands at nearly $234 million, with available funds of around $359 million. This substantial available capital will allow Olympic Steel to continue its diversification strategy, including investments in additional acquisitions, new capacity and increased efficiency through automation, all aimed at delivering shareholder value.
Olympic Steel, Inc. Price and Consensus
Olympic Steel, Inc. price-consensus-chart | Olympic Steel, Inc. Quote
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Olympic Steel currently carries a Zacks Rank #2 (Buy).
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