Russel pursues new rigs

Article Excerpt

RUSSEL METALS $21.79 (Toronto symbol RUS; TSINetwork Rating: Extra Risk) (905-819-7777; www.russelmetals.com; Shares outstanding: 62.1 million; Market cap: $1.4 billion; Dividend yield: 7.0%) has now agreed to buy City Pipe & Supply Corp. for roughly $160 million. City Pipe is an industry leader in supplying pipe, valves and fittings to oil and gas companies in the Permian, Eagle Ford, Granite Wash, Barnett and Haynesville basins. These regions together claim approximately 60% of the active rigs in the U.S. The acquisition will add just $275 million to Russel’s annual revenue of $4.2 billion. However, it lets the company further expand its high-profit-margin oilfield services business. The new operations should also complement the company’s Apex Remington unit, which operates in roughly the same areas. Russel Metals is a buy. buy…

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