SA Recycling LLC acquires assets for $35 million.
Sims Metal Management Ltd. (SMM) headquartered in Chicago and Sydney, has announced the sale of its Arizona scrap metal recycling assets to SA Recycling LLC (SAR) for $35 million. SAR is a joint venture owned equally by SMM and Adams Steel, and has operations in California, Nevada and Arizona.
The sale principally involves the real property related assets of SMM’s two scrap metal recycling facilities in Phoenix and Tucson. SMM will retain the working capital assets of the Arizona business, which is expected to monetize an additional $15 million in cash over 45 days following the sale.
In a release, Daniel Dienst, SMM’s group CEO, says, “The sale of our Arizona assets, following on the heels of our recent dispositions of our Colorado assets, our joint venture interest in Nashville and the acquisitions of assets and businesses in Alabama and Maryland over the past few months, is part of our aggressive repositioning of our shareholders’ precious capital to markets that offer the highest returns on invested capital and meet the long-term strategic growth plans we have for the important North American market.
“The transaction also resolves issues related to the SAR joint venture agreement, which granted Arizona as a territory to SAR, allowing us to operate, but to not otherwise expand in Arizona. We are pleased to have resolved this issue, while at the same time allowing our important joint venture partner in the Southwestern U.S. to expand. In this transaction we will retain an interest in the profit and cash flow of the Arizona business through our 50 percent ownership in SAR,” Dienst continues.
George Adams, SAR’s CEO, says, “This is an exciting growth opportunity for SAR and fits perfectly into our Southwestern U.S. footprint. The deal enables SAR to expand the reach of its Southern California base further into Arizona, and aligns our existing Arizona facility as a feeder yard to the shredder we acquired in this transaction. The transaction also allows the acquired facilities to realize freight efficiencies and better access to export markets through our docks in Southern California. We welcome the new Arizona employees to the SAR family.”