Business Context and Reporting Period
This Form 8-K, dated May 26, 2026, reports on Worthington Steel, Inc.'s (the "Company") commencement of a private offering of senior secured notes and provides updates regarding its ongoing acquisition of Klöckner & Co SE ("Klöckner"). The filing serves to disclose financial statements of Klöckner and unaudited pro forma combined financial information to potential investors in connection with the financing.
Key Financial Metrics and Transaction Details
- Notes Offering: The Company announced a private offering of $900,000,000 aggregate principal amount of senior secured notes due 2033. These notes are issued by WS Escrow LLC, a wholly owned subsidiary, unless the acquisition closes within three business days, in which case the Company may issue them directly.
- Acquisition Consideration: The Company is acquiring Klöckner at a cash consideration of €11.00 per share. The offer closed on April 14, 2026, following the expiration of the additional acceptance period.
- Use of Proceeds: Net proceeds from the notes, combined with term loan borrowings, ABL credit facilities, and cash on hand, will fund the acquisition consideration, shareholder loans to Klöckner, minority share purchases, repayment of existing indebtedness, transaction fees, and general working capital.
- Financial Statements Provided: The filing includes Klöckner's audited financial statements for the year ended December 31, 2025, and unaudited interim statements for the three months ended March 31, 2026. It also includes Worthington Steel's unaudited pro forma combined balance sheet as of February 28, 2026, and statements of earnings for the year ended May 31, 2025, and the nine months ended February 28, 2026.
Material Changes and Status
The primary material change is the initiation of the $900 million Notes Offering to finance the Klöckner Acquisition. While the tender offer for Klöckner shares closed on April 14, 2026, the final consummation of the acquisition remains subject to Regulatory Conditions, including merger and investment control clearances and EU foreign subsidies control clearance. These conditions must be satisfied by March 12, 2027. The filing explicitly states that no assurance can be given that the acquisition will be completed on the current timeline or at all.
Guidance, Risks, and Contingencies
- Regulatory Risk: Completion of the acquisition is contingent upon obtaining required regulatory approvals. Failure to satisfy these conditions by the March 12, 2027 deadline could prevent the transaction from closing.
- Pro Forma Limitations: The pro forma financial information is for informational purposes only and does not represent actual results of operations or project future results.
- Forward-Looking Statements: The filing contains forward-looking statements regarding the expected timeline, financing arrangements, and operational synergies. Actual results may differ materially due to risks associated with the integration, regulatory approvals, and market conditions.
- Legal Jurisdiction: The takeover offer is governed by German law and U.S. securities laws applicable to foreign private issuers. Enforcement of rights by U.S. shareholders may be difficult as the target and BidCo are located outside the United States.
Investor Verification Checklist
- Verify the status of the Regulatory Conditions (merger control and EU foreign subsidies clearance) required for the Klöckner Acquisition to close.
- Review the specific terms of the $900 million senior secured notes due 2033, including interest rates and covenants, in the accompanying press release (Exhibit 99.1).
- Examine the unaudited pro forma condensed combined financial statements (Exhibit 99.3) to understand the projected capital structure and earnings impact of the combined entity.
- Confirm the timeline for the final closing of the acquisition, noting the March 12, 2027 deadline for regulatory conditions.
- Assess the risks associated with cross-border enforcement of securities laws and the applicability of German law to the transaction.