Canada-based American Iron and Metal (AIM) will expand in the US after agreeing to acquire Liberty Iron and Metal's remaining US-based operations for $32.5mn.
The Montreal-based recycler entered into an asset and real estate purchase agreement on 25 June with Hong Kong-based Chiho Environmental Group to acquire wholly-owned subsidiary Liberty Iron and Metal's automotive shredding facilities in Erie, Pennsylvania, and Phoenix, Arizona, as well as a scrap yard in Buffalo, New York.
The Arizona shredding operations will allow AIM to expand its footing in the southwest. The company already owns a one-third stake in California-based shredder Ecology Recycling Services.
AIM owner and chief executive Herbert Black told Argus that the transaction is part of a concerted effort by the company to keep growing and expanding its presence in the US, where it only has physical locations in Maine and Ohio. AIM is a leading recycler in eastern Canada.
"We are looking to expand in the US to guarantee the future for AIM and its employees when I am long gone," Black said.
Black said the company has not made any decisions yet on what it will do with the shredder in Erie, which market sources said has been idled for a few years.
The closing date is conditional on a series of factors, including but not limited to the transferability of existing operating permits, and has not yet been established.
Chiho decided to strategically divest in the operations to improve business efficiency, according to a regulatory filing. Chiho operates multiple recycling facilities in China, as well as Europe through its Scholz subsidiary.
The company is expected to recognize an unaudited gain of approximately $6.7mn from the transaction and plans to use the proceeds to pay bank loans and to target growth opportunities.
