Metalico acquires Niles Iron &
Metalico, Inc. announced that it has entered into
an agreement to purchase substantially all of the operating assets
of Niles Iron & Metal Company, Inc., a scrap metal recycler
located in Ohio.
Metalico is a scrap metal recycler and lead products
fabricator, with most of its scrap operations in Western New York.
Niles Iron & Metal has been owned by the Clayman family since
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.
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.