The scrap recycling company Metalico Inc., headquartered in Cranford, New Jersey, has completed the sale of its lead fabricating segment for $31.3 million to a group of investors including the principal owners of Imperial Zinc Corp., Chicago, one of the largest zinc alloy and zinc anode producers in the United States.
The sale includes all of Metalico’s operating lead businesses in Alabama, Illinois and California, as well as the company’s real estate and leasehold interests in the states used by its lead facilities.
Metalico has operated its lead business primarily through Mayco Industries Inc., based in Birmingham, Alabama, and Santa Rosa Lead Products Inc., headquartered in Healdsburg, California.
Along with the sale, Metalico has agreed to a five-year noncompetition covenant in the lead fabricating business with Imperial Zinc.
The purchase price assumes a specified level of working capital was transferred to the buyers at closing and may be adjusted within 30 days of closing after confirmation of the amount of working capital conveyed.
Metalico had previously announced plans to divest noncore assets in connection with a restructuring of its institutional indebtedness. Net proceeds of the lead sale will be used to pay down debt that will result in annual interest savings of about $2.6 million, according to the company.
The company says the sale of its lead division, along with its restricting and cost reduction efforts, is steps it is taking to reduce its total debt by 30 to 40 percent by the end of the 2014.
Metalico adds that it plans to continue to identify and sell noncore assets in an effort to further reduce leverage and focus all its resources on improving the results of its scrap metal recycling operations.
The sale includes all of Metalico’s operating lead businesses in Alabama, Illinois and California, as well as the company’s real estate and leasehold interests in the states used by its lead facilities.
Metalico has operated its lead business primarily through Mayco Industries Inc., based in Birmingham, Alabama, and Santa Rosa Lead Products Inc., headquartered in Healdsburg, California.
Along with the sale, Metalico has agreed to a five-year noncompetition covenant in the lead fabricating business with Imperial Zinc.
The purchase price assumes a specified level of working capital was transferred to the buyers at closing and may be adjusted within 30 days of closing after confirmation of the amount of working capital conveyed.
Metalico had previously announced plans to divest noncore assets in connection with a restructuring of its institutional indebtedness. Net proceeds of the lead sale will be used to pay down debt that will result in annual interest savings of about $2.6 million, according to the company.
The company says the sale of its lead division, along with its restricting and cost reduction efforts, is steps it is taking to reduce its total debt by 30 to 40 percent by the end of the 2014.
Metalico adds that it plans to continue to identify and sell noncore assets in an effort to further reduce leverage and focus all its resources on improving the results of its scrap metal recycling operations.
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