Metal Management Confronts Red Lights
Two previously announced transactions involving Metal Management Inc., Chicago, have been postponed. Separate September announcements were made involving the cancellation of agreements with Universal Scrap Metals Inc., Chicago, and Miller Compressing Co., Milwaukee.
In early September, Universal Scrap Metals announced that it was withdrawing from an agreement it had reached in late April to be acquired by Metal Management. "Existing market conditions have made it inopportune to effect a transaction at this time," says Universal Scrap Metals president Philip L. Zeid.
Universal specializes in nonferrous scrap processing, handling over 70 million pounds of nonferrous material per year. "It is the intention of Universal Scrap Metals to continue ongoing business relationships with Metal Management companies," adds Zeid. "At the same time, we will move ahead with our current business plan, and independently seek out additional acquisitions and alliances that complement and strengthen our position in the nonferrous scrap processing marketplace."
In late September, Metal Management announced that a previous arrangement to purchase a minority interest in Miller Compressing Co., Milwaukee, had also been terminated. Miller Compressing Co. also announced that it will not complete its previously announced acquisition of Samuels Recycling Co. of Madison, Wisc.
"The combination of deteriorating conditions in the U.S. metals sector, including the steel mills and recycling operations, coupled with the current depressed price of Metal Management’s stock, has forced us to put off our purchase of a minority interest in Miller Compressing," Metal Management chairman T. Benjamin Jennings remarks.
Miller Compressing CEO John Busby also cited "deteriorating conditions in the U.S. scrap industry" as the reason for that company’s decision to terminate its bid to acquire Samuels Recycling.
Jackson Fibers Acquired by OmniSource
OmniSource Corp., Fort Wayne, Ind., has acquired Jackson Fibers & Metallics Inc. of Jackson, Mich. Jackson Fibers was founded in 1976 as a paper stock trader and expanded into ferrous and nonferrous processing. The company, which now handles 25,000 tons per year of ferrous scrap and 2,500 tons of nonferrous metals each year, has a current annual revenue estimate of $6 million
The deal marks the third acquisition this year for OmniSource Corp., one of the largest scrap metal companies in the U.S. the company has 26 scrap processing facilities, more than 1,100 employees and is approaching an annual revenue rate of $1 billion. "The Jackson Fibers business will be rapidly integrated into our Jackson Iron & Metal subsidiary, with the expectation that we will see immediate cost savings," says OmniSource Corp. president Danny Rifkin. "I am pleased that Dave Klein will join OmniSource as a marketing manager," Rifkin comments in regard to the former owner of Jackson Fibers.
"I am delighted to be part of the OmniSource organization and look forward to new responsibilities and challenges," says Klein. "The decision to sell is never easy; however, when the OmniSource opportunity presented itself, it certainly made it easier.
Rail Crane Company Purchased
Ohio Locomotive Crane Co. (OLC), Bucyrus, Ohio, has been purchased by International Tug & Tote Inc. (ITT), Cleveland. OLC is an 89-year-old company that manufactures a line of diesel-electric and hydraulic cranes, including American brand locomotive cranes. The company also makes an equilibrium crane called the E-Crane.TM
"As the only company in the U.S. that still manufactures large locomotive cranes from the rail up, we’ve experienced a great deal of interest recently for our locomotive products—particularly our 480 Scrap Grab’rTM line of locomotive cranes," says OLC general manager Sam Eichhorn.
The 480 Scrap Grab’r is a locomotive equipped with a two or three-piece hydraulic boom that can pull up to seven cars but is also designed to be placed on a pedestal, crawler or rubber-tired carrier.
Managing in Crisis Focus of INARE Congress
Volatility in the scrap and recycling markets will be the key topic at the Sixth International Congress of The Instituto Nacional de Recicladores (INARE), Mexico City.
"Instruments for the Recycling Industry to Manage Crisis" is the theme of the event, hosted at the Flamingo Plaza Hotel, November 18-19 in Mexico City.
More than 1,200 Mexican companies—including scrap processors, scrap consumers, equipment distributors and municipalities—are INARE members.
The "Instruments for the Recycling Industry to Manage Crisis" theme will be explored during a panel discussion that will take on such topics as the impact of the Asian crisis on Mexican markets, the stability of the peso, and methods to conduct business efficiently in Mexico.
"The Mexican import/export recovered materials market is estimated to be valued at $9 billion," says Carlos Rovelo, INARE delegate to the U.S. "Furthermore, over 80% of Mexican trade is done with the U.S.," he adds.