Metals recycler also opens a $17.8 million credit facility with Wells Fargo Bank.
The scrap metal recycling firm Industrial Services of America Inc. (ISA), headquartered in Louisville, Kentucky, has received a $3 million equity investment from Recycling Capital Partners LLC (RCP) and a $17.8 million credit facility from Wells Fargo Bank, National Association.
RCP is an investment entity principally owned by Daniel Rifkin, the founder and CEO of MetalX LLC, a scrap metal recycling company headquartered in Waterloo, Indiana. Rifkin is the former president of OmniSource Corp., a large scrap metal firm that was acquired by Steel Dynamics in 2007.
ISA says RCP's equity investment delivers significant strategic value, providing capital from one of the most respected names in the scrap metal industry.
RCP's investment includes the purchase of 857,143 shares of ISA's common stock. In addition, RCP received a five-year warrant to purchase an additional 857,143 shares of common stock at a price of $5 per share. In connection with the investment, RCP currently is entitled to designate one member to the company's board of directors. ISA also granted RCP registration rights with respect to the common stock and certain rights of first refusal with respect to additional equity investments in the company.
"The entire ISA team is energized by the resources and experience that RCP brings to the company," says Sean Garber, ISA president, "which allow us to pursue our growth strategy and other initiatives. With a stronger balance sheet, we expect to focus on building value for shareholders, This is truly a game-changing moment in ISA's history."
"We are very pleased to have completed this investment in ISA and believe that the combination of the equity investment, the new credit facility and dynamic new leadership will stimulate the company's growth and performance. This investment supports our view that this industry presents viable opportunities for long-term growth," says Rifkin.
Additionally, ISA closed on a $17.8 million credit facility with Wells Fargo. The new credit facility includes a $15 million revolving line of credit and a $2.8 million equipment term loan. The new credit facility replaces ISA's existing loan.
"We couldn't be happier with the outcome of our financing efforts," says Orson Oliver, chairman and CEO of ISA. "We entertained proposals from several well-known lenders and equity investors but thought the strategic fit of RCP and the creative approach of Wells Fargo distinguished these partners in our search. We are extremely pleased to know that ISA is on sound financial footing and capitalized for future growth."
In related news, ISA has appointed three new members to its board: William Yarmuth, Vincent Tyra and Sean Garber.
Yarmuth is chairman and CEO of Almost Family Inc., a Louisville-based provider of home health services. Tyra is president of ISCO Industries, a customized piping solutions provider, also based in Louisville. Garber is president of Algar Inc., a company specializing in the sale of new and used auto parts as well as in automobile and metal recycling. The company has three locations in Kentucky and one in Missouri.
Additionally, as part of a previously announced management services agreement between Algar and ISA, Algar is providing ISA with day-to-day senior executive level operating management supervisory services and serves as president of ISA.
ISA also reports that Alan Gildenberg has resigned from the board.