SA Recycling has agreed to buy PSC Metals from Icahn Enterprises for $290mn, the latest move in a wave of consolidation across the US scrap metal recycling industry.
Ohio-based PSC operates more than 30 scrap metal processing and trading locations in seven US states, primarily in the Midwest, Ohio valley and south. The company has four shredders in Tennessee, including Chattanooga, Harriman, Knoxville, and Nashville; three in Ohio, including Canton, Columbus, and Wooster; one in Beaver Falls, Pennsylvania and one in St Louis, Missouri.
Icahn Enterprises will retain ownership of the land where PSC's Nashville shredder is located and lease the property back.
The acquisition is expected to close by the end of 2021. The deal includes debt to be repaid at closing, Icahn said.
Icahn had carried PSC Metals on its balance sheet at a value of $141mn as of 30 June.
Icahn, which bought PSC in 2007, had been exploring a sale since May.
The deal is California-based SA's largest acquisition since it purchased 17 scrap metal processing facilities from Newell Recycling Southeast in February 2016. It is one of the most significant scrap acquisitions by an independent recycler in the US in over the last decade.
SA Recycling has been on an buying spree over the last several years, particularly in the southeastern US. It most recently bought Tennessee shredder Southern Recycling, two Atlanta yards and several in the Miami, Florida, area.
Consolidation in the US scrap industry has accelerated over the last year with steelmakers and recyclers making major acquisitions to feed expanding melt capacity coming on line over the next four year.
SA Recycling chief executive George Adams said this week at a global recycling conference that he thinks there is going to be massive shortages of scrap in the future as new scrap intensive electric arc finance (EAF) steelmaking capacity comes on line.
The US is projected to add nearly 15mn short tons/yr of sheet steel EAF capacity from 2020-24.
SA Recycling is a 50:50 joint venture between global recycler Sims Metal Management and Adams Steel.
SA Recycling operates more than 90 facilities the US, including 15 shredders and three port-loading operations in Long Beach and Los Angeles, California, in addition to Savannah, Georgia. The company also operates an iron ore facility in Long Beach.
