Worthington Steel (WS) Acquires Kloeckner & Co. for $2.4B, Creating North America's Second Largest Steel Service Center
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Acquisition Announcement: Worthington Steel has agreed to acquire metal processing firm Kloeckner & Co. for $2.4 billion, positioning itself as North America's second-largest steel service center and significantly enhancing its market presence.
- Scale Expansion: The acquisition is expected to triple Worthington's sales scale to approximately $9.5 billion while maintaining margins above 7%, thereby strengthening the company's financial stability and competitive edge.
- Synergy Generation: Worthington anticipates generating $150 million in actionable annual run-rate synergies, which will directly enhance profitability and substantially increase earnings per share within the first full year post-acquisition.
- Market Reaction: Following the acquisition announcement, Worthington Steel's shares rose 3.2% in after-hours trading, reflecting positive market sentiment and increased investor confidence in the strategic move.
Analyst Views on WS
Wall Street analysts forecast WS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WS is 36.00 USD with a low forecast of 36.00 USD and a high forecast of 36.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 37.400
Low
36.00
Averages
36.00
High
36.00
Current: 37.400
Low
36.00
Averages
36.00
High
36.00
About WS
Worthington Steel, Inc. is a metal processor that partners with customers to deliver technical and customized solutions. The Company specializes in carbon flat-roll steel processing, electrical steel laminations and tailored-welded solutions. Its value-added processing capabilities include galvanizing, pickling, configured blanking, specialty cold reduction, lightweighting and electrical lamination. The Company operates approximately 38 facilities in seven states and 10 countries. It serves its customers primarily by processing flat-rolled steel coils, which it sources primarily from various North American steel mills, into the precise type, thickness, length, width, shape, and surface quality required by customer specifications. Its steel products include Hot Rolled Steel, cold rolled steel, and galvanized steel. The Company also produces electric motor laminations. The Company serves various end markets, including automotive, heavy truck, agriculture, construction, and energy.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
