FRD closes Florida asset buy; credit line cut to $125M, maturity extended

Rhea-AI Filing Summary

Friedman Industries acquired Century Metals & Supplies' Miami operations and certain Tampa and Orlando assets for approximately $45.25 million cash plus a $3.5 million five-year promissory note, with a final purchase price subject to net working capital adjustments and an earn-out of up to $10 million payable over four years based on performance. The company also entered a Fifth Amendment to its Amended and Restated Credit Agreement to permit the Acquisition, replace BMO Harris with Wells Fargo as a lender, reduce aggregate commitments from $150 million to $125 million, set pricing at prime-1.45% or adjusted Term SOFR+1.55%, adjust borrowing bases and extend the facility maturity to August 29, 2030. A press release announcing the closing was issued on September 2, 2025.

Positive

• Acquisition expands operations in Florida via purchase of Miami facilities and assets in Tampa and Orlando
• Consideration mix limits immediate cash outflow: $45.25 million cash at closing plus a $3.5 million five-year note and an earn-out tied to performance
• Credit amendment permits the Acquisition and extends facility maturity to August 29, 2030, providing multi-year financing stability
• Lender replacement to Wells Fargo may diversify financing relationships

Negative

• Aggregate credit commitments reduced from $150 million to $125 million, lowering available liquidity capacity
• Contingent earn-out up to $10 million creates additional future potential cash obligations tied to performance
• Issuance of a $3.5 million note increases direct financial obligations with a five-year maturity

Insights

M&A Specialist

TL;DR Strategic asset acquisition expands Friedman's Florida footprint with structured consideration and contingent upside.

The Acquisition transfers real estate, operations, equipment and inventory from Century's Florida facilities to Friedman for $45.25 million cash plus a $3.5 million note and a contingent earn-out up to $10 million. The structure combines immediate cash consideration, a short-term note, and performance-based contingent payments, aligning seller incentives with integration success. This transaction is material and potentially accretive if the acquired operations meet performance metrics; the earn-out limits immediate cash strain while providing upside to sellers.

Credit Analyst

TL;DR Credit amendment permits the deal but reduces available commitments and changes lender composition.

The Fifth Amendment expressly permits the Acquisition, replaces BMO Harris with Wells Fargo, reduces total commitments from $150 million to $125 million, amends borrowing base calculations and extends maturity to August 29, 2030. Pricing is set at prime-1.45% or adjusted Term SOFR+1.55%. These changes preserve liquidity to support the Acquisition but shrink capacity, creating modest refinancing and covenant considerations for the company depending on future liquidity needs.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 29, 2025

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

Texas	1-07521	74-1504405
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1121 Judson Road Suite 124, Longview, Texas 75601

(Address of principal executive offices, including zip code)

(903) 758-3431

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 Par Value	FRD	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement

Asset Acquisition from Century Metals & Supplies, Inc.

On August 29, 2025, Friedman Industries, Incorporated (the “Company”) entered into a definitive agreement with Century Metals & Supplies, Inc. (“Century”), CEME Holdings LLC (“CEME”), Palm Lakes Investment LLC (“PLI”), Jemi Investments, LLC (“JEMI”, together with Century, CEME and PLI as “Sellers”), the equityholders of the Sellers and Misael Rosario, as Seller Representative, pursuant to which the Company acquired the real estate, operations, equipment, inventory and certain other assets of the Sellers of Century’s Miami, FL facilities and certain inventory and other assets at Century’s Tampa, FL and Orlando, FL (the “Acquisition”). Under the terms of the agreement, the Company acquired the assets for approximately $45.25 million in cash at closing, along with a note issued by the Company with a principal amount of $3.5 million with a five-year maturity date. The final purchase price is subject to adjustment based on final net working capital levels and an earn-out that allows the Sellers to receive up to $10 million in additional consideration over a four-year period based on certain performance metrics of the acquired business. On September 2, 2025, the Company issued a press release announcing the closing of the Acquisition. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Credit Facility Amendment

On August 29, 2025, the Company also entered into a Fifth Amendment (the “Amendment”) to that certain Amended and Restated Credit Agreement and Second Amendment to Security Agreement by and among the Company, as a borrower, Century Metals & Supplies, LLC, a Texas limited liability company, as a borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Amendment amends that certain Amended and Restated Credit Agreement dated as of May 19, 2021 (as amended to date, “A&R Credit Agreement”) to, among other things, (i) permit the Acquisition, (ii) provide that BMO Harris Bank N.A. is replaced as a lender under the A&R Credit Agreement with Wells Fargo Bank, N.A., (iii) reduce the aggregate commitments under the A&R Credit Agreement from $150 million to $125 million, (iv) provide for revolving borrowings either at prime rate plus a margin of -1.45% or adjusted Term SOFR plus a margin of 1.55%, (v) extend the maturity date to August 29, 2030, and (vi) make certain borrowing base adjustments in contemplation of the Acquisition.

The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets

The information provided in Item 1.01 of this Current Report under the heading “Asset Acquisition from Century Metals & Supplies, Inc.” is incorporated by reference to this Item 2.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information provided in Item 1.01 of this Current Report on Form 8-K under the heading “Credit Facility Amendment” is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.1 Fifth Amendment to Amended and Restated Credit Agreement and Second Amendment to Security Amendment, dated August 29, 2025, by and between Friedman Industries, Incorporated, JPMorgan Chase Bank, N.A.

99.1 Press Release issued by Friedman Industries, Incorporated on September 2, 2025

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 3, 2025

	FRIEDMAN INDUSTRIES, INCORPORATED
	By:	/s/ Alex LaRue
		Alex LaRue
		Chief Financial Officer - Secretary and Treasurer

FAQ

What did Friedman Industries (FRD) acquire from Century Metals & Supplies?

Friedman acquired the real estate, operations, equipment, inventory and certain other assets of Century's Miami, Tampa and Orlando facilities for approximately $45.25 million cash plus a $3.5 million five-year note and an earn-out up to $10 million.

How is the Acquisition financed?

The Acquisition was financed with $45.25 million cash at closing, a $3.5 million promissory note (five-year maturity), and potential earn-out payments up to $10 million over four years; the company amended its credit facility to permit the transaction.

What changed in Friedman's credit facility?

The Fifth Amendment permits the Acquisition, replaces BMO Harris Bank with Wells Fargo as a lender, reduces aggregate commitments from $150 million to $125 million, sets borrowing rates at prime-1.45% or adjusted Term SOFR+1.55%, adjusts the borrowing base, and extends maturity to August 29, 2030.

Is there any contingent consideration tied to the deal?

Yes. Sellers may receive up to $10 million in additional consideration over four years based on specified performance metrics of the acquired business.

When was the Acquisition announced to the public?

The company issued a press release announcing the closing on September 2, 2025.