The Sims Metal business unit of Australia-based Sims Ltd. has purchased Maryland-based Atlantic Recycling Group (ARG), including the firm’s auto shredding plant in Baltimore.
Atlantic Recycling Group has two locations in Baltimore operating under the United Iron & Metal name, including the shredder yard, and operates a location under the Montgomery Scrap name in Rockville, Maryland.
The company’s co-founder Robert Millstone died this September, after having spent more than four decades in the scrap industry. Contacted by Recycling Today, remaining ARG principal David Caffee says under terms of the sale, he will stay with ARG for two years.
According to Sims, ARG processes and sells approximately 150,000 metric tons of ferrous and nonferrous scrap annually.
Sims says ARG is being acquired “for a total consideration of $37 million plus working capital adjustments,” with the acquisition expected to be finalized Jan. 1, 2022. “The acquisition price implies an enterprise value/EBITDA (earnings before interest, taxes, depreciation and amortization) multiple of 4.2 on a pre-synergies basis,” adds Sims.
In its news release announcing the acquisition, Sims states, “The transaction provides operational and commercial synergies and is consistent with the company’s strategy to grow in large coastal markets which offer the potential for top tier processing facilities and bulk export optionality.”
The ARG acquisition helps Sims expand its East Coast operational footprint, with it now stretching from South Carolina to New England, “an area incorporating many of the largest markets for secondary metal generation in the U.S.A,” states Sims.
“I welcome the team at Atlantic Recycling into the Sims Limited family,” says Alistair Field, CEO and managing director of Sims Ltd. “This acquisition provides Sims Metal with entry into a complementary market and strengthens the already solid East Coast footprint in North America.”