Sims Metal, a global leader in metal recycling, has announced its agreement to acquire the assets of Baltimore Scrap Corp (BSC) and its affiliated entities, a prominent metal recycler based in the United States. The acquisition is expected to be completed in October 2023, pending customary closing conditions and regulatory approvals.
Baltimore Scrap Corp operates 17 facilities across five states in the American Northeast, including Maryland, Virginia, Pennsylvania, New York, and New Jersey. The company has a significant presence in the metal recycling industry, with an annual sales volume of around 600,000 tonnes. BSC’s operations include several shredders and extensive rail, barge, and port infrastructure, positioning it well to serve both domestic and export markets.
The acquisition is valued at US$177 million, along with additional adjustments for working capital to be determined at closing. The transaction reflects an EV/EBITDA multiple of 5.4x based on a three-year trailing average, pre-synergies. Following synergies, the EV/EBITDA multiple is expected to decrease to 4.2x.
Sims Metal’s acquisition of Baltimore Scrap Corp aligns with its strategic goal to expand its metal recycling presence in North America and enhance its diversity of sales channels. The move also contributes to Sims Metal’s capital recycling strategy, using proceeds from non-core asset sales and other resources to fund strategic acquisitions and investments.
Alistair Field, CEO and Managing Director of Sims Limited, expressed enthusiasm for the acquisition, highlighting the complementary fit with their expansion strategy and the potential to tap into the growing demand for ferrous and non-ferrous scrap metal in the US. The transaction is anticipated to further strengthen Sims Metal’s position in the metal recycling industry and contribute to its growth in large markets.
For more information about Sims Metal and its acquisition of Baltimore Scrap Corp, please refer to the official company announcements and website.