Worthington Steel, announced today that WS Escrow LLC (the “Escrow Issuer”), a wholly owned subsidiary of Worthington Steel, intends to offer (the “Offering”), subject to market conditions and other factors, $900 million aggregate principal amount of senior secured notes due 2033 (the “Notes”).
Worthington Steel intends to use the net proceeds from the proposed Offering, together with borrowings under a new term loan credit facility, (i) to fund the consideration and other payments in connection with Worthington Steel’s pending acquisition (the “Kloeckner Acquisition”) of Kloeckner & Co SE (“Kloeckner”), (ii) to fund loans to Kloeckner pursuant to a shareholder loan, (iii) to fund share purchases and other compensation to remaining minority Kloeckner shareholders in connection with the Kloeckner Acquisition, (iv) to pay transaction fees and expenses related to the foregoing, (v) to repay certain existing indebtedness of Worthington Steel and Kloeckner and (vi) for general working capital purposes of Worthington Steel and its subsidiaries. The Offering is not conditioned on the consummation of the Kloeckner Acquisition.
If the Kloeckner Acquisition is not expected to be consummated within three business days of the closing of the Offering, the Escrow Issuer will issue the Notes and will deposit (or cause to be deposited) the net proceeds of the Offering into an escrow account (the “Escrow Account”) for the benefit of the holders of the Notes until the date on which certain escrow release conditions are satisfied (the “Escrow Release”). If the Kloeckner Acquisition is expected to be consummated within three business days of the closing of the Offering, then Worthington Steel may elect to issue the Notes directly, rather than through the Escrow Issuer, and the net proceeds will not be deposited into escrow. If the Acquisition is not consummated by March 12, 2027 or upon the occurrence of certain other events, the Notes will be subject to a special mandatory redemption at a price equal to 100% of the issue price of the Notes, plus accrued and unpaid interest to, but not including, the date of the special mandatory redemption.
If the Notes are issued by the Escrow Issuer, prior to the Escrow Release, the Notes will not be guaranteed and will be the sole obligation of the Escrow Issuer. Substantially concurrently with the Escrow Release, the Escrow Issuer will merge with and into Worthington Steel, with Worthington Steel continuing as the surviving entity. Worthington Steel will then assume the obligations of the Escrow Issuer under the Notes and the indenture governing the Notes, and the Notes will be fully and unconditionally guaranteed by each of Worthington Steel’s subsidiaries that guarantee Worthington Steel’s obligations under its new term loan credit facility. From and after the Escrow Release, the Notes and the related guarantees will be secured by liens on substantially all of Worthington Steel’s and the guarantors’ assets, subject to certain exceptions.
The Notes and the related guarantees have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), any state securities laws or the securities laws of any other jurisdiction. The Notes and the related guarantees may not be offered or sold in the United States or to, or for the benefit of, U.S. persons absent registration or pursuant to an exemption from, or in a transaction not subject to, registration. The Notes and related guarantees will be offered only to persons who are either reasonably believed to be “qualified institutional buyers” under Rule 144A or who are “non-U.S. persons” under Regulation S under the Securities Act.
This press release is neither an offer to sell, nor the solicitation of an offer to buy, the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.
About Worthington Steel
Worthington Steel is one of North America’s premier value-added metals processors with the ability to provide a diversified range of products and services that span a variety of end markets.
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