Derichebourg cites global demand underpinning its acquisition

Paris-based scrap recycling firm Derichebourg S.A. has made a filing with the French Financial Markets Authority that refers to its confidence in the global scrap market as a reason for the previously announced acquisition by its subsidiary Derichebourg Environnement of Luxembourg-based scrap firm Groupe Ecore Holding S.A.S.

“The Derichebourg group wishes to increase its presence in the European and global market for the sale of ferrous metals and nonferrous metals, because it firmly believes that demand will continue to grow in the years to come, as the use of recycled raw materials helps to limit global warming when compared to metal production using an equivalent amount of non-recycled raw materials,” states Derichebourg in part of its filing.

The filing describes Ecore as operating at 83 sites worldwide, “mainly in France, with other sites in Belgium, Switzerland, Romania, Hungary and Luxembourg.” Derichebourg describes ferrous scrap as making up 81 percent of what Ecore handles at its yards, followed by 6 percent nonferrous metals and the balance being paper, plastic and old corrugated containers (OCC).

In its most recently completed fiscal year, Ecore generated more than €1 billion ($1.22 billion) in revenue and 77.5 million euros ($94 million) in earnings before interest, taxes, depreciation and amortization (EBITDA) The company and its 1,300 employees sold some 2.46 million tons of ferrous scrap and 235,000 tons of nonferrous metals.

The Derichebourg group estimates it could save some 11 million euros ($13.4 million) annually in transportation costs by combining the two companies and another 10 million euros ($12.2 million) annually in other unspecified “synergies.” The completion of the acquisition is expected between September and December this year.

In late 2019, Derichebourg also acquired Spain-based metal recycling firm Lyrsa Group for about $480 million.