Pittsburgh-based American Zinc Recycling LLC (AZR) has been acquired by Luxembourg-based Befesa SA for $450 million. Additionally, Befesa says it will invest $10 million for a joint venture minority stake in American Zinc Products (AZP), AZR’s zinc refining operation in Rutherford County, North Carolina.
The combined company, which will retain the employees in AZR’s steel mill baghouse dust recycling business, will operate under the Befesa name.
“This transaction brings together the two established leaders in our respective markets to create a global leader in recycling electric arc furnace (EAF) dust,” says Joel Hawthorne, CEO of AZR. “We’ve been working with the Befesa management cooperatively and productively, and I’m confident this transaction is a huge win for our shareholders, employees and our customers.”
The transaction increases Befesa’s total steel dust recycling capacity by 40 percent to 1.7 million tons at 12 facilities in Europe, Asia and the United States. Combining with AZR will provide Befesa with its first North America operation and “a significant and well- developed presence in the growing EAF steelmaking markets” in the U.S., Befesa says.
AZP’s zinc refining operation will be a joint venture between Befesa and the existing AZR shareholders, though Befesa may eventually acquire 100 percent of AZP based on “call and put options” between now and the end of 2023.
The North Carolina AZP facility produces special high grade (SHG) and continuous galvanizing grade (CGG) zinc using metal drawn from collected steel mill dust, say the companies. The EAF dust is processed at six AZR (now Befesa) recycling facilities in the U.S. and then treated via solvent extraction and electrowinning technologies by AZP.
“The combination with Befesa is an exciting milestone in AZR’s 170-plus-year history and an incredible opportunity to advance our mission of recycling hazardous steel mill dust and contributing to a greener economy,” Hawthorne says. “On a day-to-day basis, it’s business as usual for our customers and employees, but we will now have the opportunities, resources and support to serve our customers and grow our business even further.”
The transaction is expected to close by the end of this September, subject to regulatory approvals and closing conditions. Pennsylvania-based battery and stainless steel mill residues recycler International Metals Reclamation Co. (INMETCO) will continue to be a wholly owned subsidiary of AZR and operate as a standalone business, the firms say.
Toronto-based BMO Capital Markets acted as financial advisor to AZR in connection with the transaction and global law firm Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to AZR.