Sims Metal Acquires Baltimore Scrap Corp
NEW YORK--(Business Wire / Korea Newswire) August 16, 2023 -- Sims Metal, a global leader in metal recycling, today announced the company has agreed to acquire the assets of United States-based metal recycler, Baltimore Scrap Corp (BSC) and its affiliated entities. The acquisition is anticipated to close in October 2023 subject to the satisfaction, or waiver, of customary closing conditions, including required regulatory approvals.
BSC is one of the largest metal recyclers in the American Northeast with 17 facilities across five states - Maryland, Virginia, Pennsylvania, New York, and New Jersey - with sales volumes of approximately 600,000 tonnes per annum. BSC’s operations include four shredders and extensive rail, barge and port infrastructure, and the business is well-positioned with attractive proximity to both growing domestic demand markets and export.
Total consideration for the acquisition is US$177 million, plus working capital and other adjustments to be determined at closing. The transaction implies an EV/EBITDA multiple of 5.4x on a three year trailing average, pre-synergies basis. On an equivalent post-synergies basis, the EV/EBITDA multiple is forecasted to reduce to 4.2x.
This transaction is consistent with Sims Metal’s strategy to grow in large markets by operating best-in-class assets and producing high-quality differiented outputs with efficient logistic channels to an expanding customer base.
“Baltimore Scrap Corp is a company we have admired for many years. They have a strong management team who has built an excellent business over many years,” said Alistair Field, chief executive officer and managing director of Sims Limited. “This acquisition is a highly complementary fit with our strategy to expand the metal recycling business in North America and increase our diversity of sales channels to growing US domestic demand for ferrous and non-ferrous scrap metal. I welcome the Baltimore Scrap Corp team and their group of affliates to the Sims family.”
Stephen Mikkelsen, chief financial officer of Sims Limited, added, “The BSC acquisition is another example of our capital recycling strategy. We anticipate the acquisition to be substantially funded through the redeployment of proceeds from non-core asset sales and other assets that are not likely to achieve their required rate of return.”
About Sims Metal
Founded in Sydney in 1917, Sims Metal has grown from being an Australian-centric company to one of the most significant metal recycling companies in the world. A division of Sims Limited, Sims Metal has bases of operation in Australia, the United Kingdom and the United States where the company buys and processes recyclable ferrous and non-ferrous metal and sells the recycled material to manufacturers in 30 countries. Each year, Sims Metal recycles approximately 10 million tons of metal across its global operations. In line with their shared purpose, create a world without waste to preserve our planet, Sims Metal is preparing for, and adapting to, the significant industrial and environmental changes in society and the industry. Visit www.simsmm.com to learn more.
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This is a news release distributed by Korea Newswire on behalf of this company.