Dive Brief:
- Metalico, Inc. has agreed to sell the company to Total Merchant Limited for $105 million. The Cranford, NJ-based Metalico operates scrap metal recycling plants.
- The cash deal includes a payment of 60 cents per share to Metalico’s stockholders. It also includes $44 million for Metalico’s outstanding equity plus the cost of settling he firm’s debt. That debt is $45 million; an assumption of $16 million additional debt also is part of the agreement.
- Total Merchant is an investment venture that was created to capitalize on opportunities in the U.S. metals and commodities market. The Chinese firm is led by Chung Sheng Huang, chairman of the board and managing director of Yechiu Group, of China, a recycler and producer of aluminum and aluminum alloys that has scrap metal recycling plants in China and Malaysia.
Dive Insight:
As per the merger pact, a subsidiary of Total Merchant will combine with and become part of Metalico, making Metalico a subsidiary of Total Merchant. The merger awaits approval by a majority of Metalico’s holders of common stock.
