Schnitzer Steel Acquires Pick-N-Pull Auto Dismantlers

Portland, OR - One of Schnitzer Steel Industries, Inc.'s wholly-owned subsidiaries has signed a definitive agreement to acquire the interest of its 50 percent partner in Pick-N-Pull Auto Dismantlers. In addition, Schnitzer's subsidiary has agreed to buy the Stockton Pick-N-Pull store, which is not part of the joint venture, but is the single largest volume store in the Pick-N-Pull network. The seller in the transaction is Bob Spence, who currently manages Pick-N-Pull.

The joint venture stores, together with Stockton (Pick-N-Pull), are one of the country's leading self service used auto parts and auto dismantling networks, with 23 locations in northern California and five other states. The self-service auto dismantling business is believed to be the fastest growing segment in the auto dismantling business.

At each store, automobiles are displayed for customers to view and remove parts to purchase. The remaining recycled auto bodies are then sold for scrap to area metals recycling facilities, including Schnitzer. Currently, Schnitzer's Oakland, California, metals re-cycling facility is Pick-N-Pull's largest customer of its recycled auto bodies.

Schnitzer's subsidiary has been a 50 percent partner in the joint venture for the past thirteen years. Commenting on the acquisition, Robert W. Philip, President and Chief Executive Officer, called attention to the fact that, "Our joint venture in Pick-N-Pull has, for many years, been an important part of our strategy to grow in the metals recycling business." Philip went on to comment that, "Bob Spence and his experienced management team have taken this business to a new level, which is demonstrated by the fact that from 1999 to 2002, the net profits generated from this business have grown at a compounded annual rate of nearly 50 percent. We are pleased to say that pursuant to the terms of the acquisition agreement, Mr. Spence will continue to operate Pick-N-Pull at least through January 31, 2004. It is our plan to continue to support Pick-N-Pull's management team with the capital and infrastructure needed to aggressively ex-pa nd this business."

The acquisition is expected to close in mid-February 2003. The estimated purchase price is approximately $85 million, subject to adjustment for certain year-end balance sheet items and environmental liabilities, if any. The estimated purchase price includes the assumption of approximately $10 million of net debt, approximately $6 million of which represents amounts currently owed to Schnitzer. In addition to typical closing conditions, the transaction is contingent upon satisfactory completion of environmental due diligence on Pick-N-Pull's facilities. The agreement also provides for a purchase price adjustment approximately one year after closing based upon the operating results of the acquired business.