Jul 13 2006
Metalico announced today that it has entered into an agreement to purchase substantially all of the operating assets (other than real property interests) of Niles Iron & Metal Company, Inc., a major scrap metal recycling concern in northeastern Ohio.
Metalico is a leading scrap metal recycler and lead products fabricator, with most of its scrap operations in Western New York. Niles Iron & Metal has been owned and operated by the Clayman family since 1917.
Niles Iron & Metal sold roughly 226,496 tons of scrap in 2005, producing revenues of $65.6 million. Approximately 91% of the company's product mix is comprised of ferrous metals, which provided 68% of its 2005 revenues. The remainder is non-ferrous metals and paper products. For the twelve months ended June 30, 2006, Metalico and Niles Iron & Metal generated combined revenues of approximately $256 million.
"We are excited about this opportunity to open a new platform in a neighboring market in the Great Lakes corridor by acquiring a high-quality operation," said Carlos E. Aguero, Metalico's Chief Executive Officer, "and we are particularly pleased to be working with the experienced scrap metal professionals who've had so much to do with the success of Niles Iron & Metal."
Gary Clayman, Vice President of Niles Iron & Metal and manager of its ferrous operations, said, "We are looking forward to passing the stewardship of our family business on to Metalico. We're confident that our customers will benefit from the same quality service our family has delivered for nearly ninety years."
Under the terms of the asset purchase agreement, Metalico will enter into long-term leases for Niles Iron & Metal's two operating sites in Niles, Ohio and will retain the services of the company's senior management. The purchase price for the acquisition (which includes a transfer of $6.5 million of working capital) is approximately $44 million, subject to additional closing adjustments to the extent working capital is less than or greater than $6.5 million, and is expected to be financed through a debt facility to be entered into at the closing of the transaction. The closing is subject to the satisfaction of customary conditions, including the completion of the financing, but is expected to occur in the third quarter. Notwithstanding, there can be no assurance that the conditions to closing will be met or that the transaction will be consummated in the third quarter or at all.
http://www.metalico.com