Pick-N-Pull to add Greenleaf's 22 locations to its existing 30, growing its presence in the Southern, Eastern and Midwestern U.S.
Schnitzer Steel Industries Inc., headquartered in Portland, Ore., has announced that its subsidiary Pick-N-Pull Auto Dismantlers has acquired GreenLeaf Auto Recyclers LLC, an auto dismantling and recycling business that sells reclaimed auto parts primarily to collision and mechanical repair shops.
Pick-N-Pull, a self-service used auto parts retailer, will add GreenLeaf's 22 locations to its existing network of 30 stores, significantly increasing its presence in the Southern, Eastern and Midwestern United States.
"Our acquisition of GreenLeaf significantly expands Pick-N-Pull's national retail footprint and represents our initial venture into the substantial full-service segment of the recycled auto parts market that services commercial customers. We believe there is excellent growth potential in both the self-service and full-service markets," John D. Carter, Schnitzer Steel's president and CEO, says. "As we swiftly integrate these stores with our existing business, we intend to convert some to our very successful self-service model while others will remain full-service or have combined operations. Additionally, we will continue to evaluate the effectiveness and synergies of individual GreenLeaf stores and appropriately address incompatible locations. We anticipate that this acquisition may have a modestly dilutive to neutral effect on earnings in the first year and provide significant earnings growth in future years."
Carter adds, "As we continue growing our metals recycling business, these operations have the capacity and geographic distribution to be significant sources of scrap metal to our existing and future facilities in these regions."
The newly acquired locations are in Arizona, Florida, Georgia, Illinois, Massachusetts, Michigan, Nevada, North Carolina, Ohio, Virginia and Texas. Prior to this announcement, Pick-N-Pull had existing operations in nine states and two Canadian provinces that serve more than 4 million retail customers and process more than 225,000 cars per year. The combined operations of Pick-N-Pull and GreenLeaf will make Schnitzer Steel one of the largest suppliers of used OEM (original equipment manufacturer) parts in the industry, according to a release from Schnitzer Steel.
"We will leverage our proprietary technology, systems and other resources to enhance these complementary operations," Tom Klauer, president of Pick-N-Pull, says. "Also, we look forward to combining the knowledge and expertise of GreenLeaf's talented management and workforce with our own. Together, we will be able to provide an even broader spectrum of parts offerings and superior customer service."
The total consideration paid to GreenLeaf for these operations was $22.5 million, subject to a post-closing working capital adjustment.
In a related transaction, Pick-N-Pull purchased five parcels of real estate and certain GreenLeaf debt obligations from Ford Motor Co.. GreenLeaf leased these parcels in connection with its business. Total consideration for the property and the promissory notes was $21.5 million.
Schnitzer will discuss the GreenLeaf acquisition as part of its fourth quarter results conference call Oct. 6, 2005.
Schnitzer Steel Industries Inc. is one of the nation's largest recyclers of ferrous metals, a used auto parts retailer with more than 50 locations across the U.S. and in Canada and a manufacturer of finished steel products. It has a significant metals presence on the West Coast and Northeastern seaboard, as well as a trading business that principally sells recycled metal products in foreign markets. In addition, the company's steel mill has an annual production capacity of approximately 700,000 tons of finished steel products.
More information about Schnitzer Steel Industries is available online at www.schnitzersteel.com.