WOR Worthington Enterprises Inc

Item 1.01  Entry into a Material Definitive Agreement.

On October 29, 2021, Worthington Steel of Michigan, Inc. (“WSMI”), a Michigan corporation and wholly-owned subsidiary of Worthington Industries, Inc. (the “Registrant”), entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) with Tempel Holdings Inc., an Illinois corporation (the “Seller”), and Tempel Steel Company, an Illinois corporation ( “Tempel”). The Purchase Agreement provides, among other things, that, upon the terms and subject to the conditions set forth therein, WSMI will purchase from Seller all of the issued and outstanding capital stock of Tempel (the “Transaction”). Effective upon the consummation of the Transaction (the “Closing”), Tempel will be a wholly-owned subsidiary of WSMI and operate within the Registrant’s Steel Processing segment.

The purchase price to be paid by WSMI in the Transaction is approximately $255 million plus the assumption of certain liabilities, and is subject to adjustment based on the working capital of Tempel as of the Closing. A portion of the purchase price will be used to pay off certain indebtedness and other liabilities of Tempel in conjunction with the Closing. The purchase price is expected to be funded primarily using the Registrant’s cash.

The Purchase Agreement contains customary representations, warranties and covenants, including a covenant that each of the parties will use commercially reasonable efforts to cause the Transaction contemplated by the Purchase Agreement to be consummated. The Purchase Agreement also requires Tempel to conduct its business and operations during the period between the execution of the Purchase Agreement and the Closing according to the ordinary course of business consistent with past practice. The Closing is expected to occur in December of 2021.

Tempel is headquartered in Chicago, Illinois and is a leading manufacturer of precision motor and transformer laminations for the electrical steel market. The operations at the five manufacturing facilities of Tempel will strengthen the Registrant’s Steel Processing business and complement the Registrant’s existing automotive offerings.

Operations of Tempel in Chicago, India and Mexico produce both motor and transformer laminations for the electrical steel market, while operations in Canada produce transformer laminations, and operations in China produce motor laminations.  

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed herewith as Exhibit 2.1 and is incorporated herein by reference. The Purchase Agreement has been included as an exhibit to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Registrant, WSMI, Tempel or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of that agreement and as of specific dates; were made solely for the benefit of the parties to that agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures; may not have been intended to be statements of fact, but rather, as a method of allocating contractual risk and governing the contractual rights and relationships between the parties to the Purchase Agreement; and may be subject to standards of materiality applicable to contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Registrant, WSMI or Tempel or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Registrant’s public disclosures.