Dive Brief:
- Total Merchant Ltd. has acquired scrap processing firm Metalico Inc. of Cranford, NJ, after Metalico’s shareholders last week approved Total Merchant's all-cash offer of $102 million. Total Merchant is controlled by Chung Sheng Huang, the chairman of the board and managing director of China-based Ye Chiu Group, a producer of aluminum and aluminum alloys and recycler of nonferrous metals.
- Before trading ceased on Sept. 11, Metalico CEO Carlos E. Aguero sold more than 5.2 million shares of stock for a total value of $3.1 million, according to FinancialWisdom.com.
- Metalico said in a press release that it "expects that the relief from debt resulting from the sale and its strengthened balance sheet will reinvigorate Metalico as a prominent force in its markets and potential acquirer of other scrap operations."
Dive Insight:
Total Merchant is an investment venture that was created to capitalize on opportunities in the U.S. metals and commodities market. Ye Chiu Group has scrap metal recycling plants in China and Malaysia. Recycling Today reported that in 2002, it established America Metal Export Inc. of Alhambra, CA to help it secure "continuous and stable" scrap supplies from the U.S.
In obtaining Metalico, the company is also obtaining its ferrous and nonferrous facilities — including three auto shredders — in New York, Pennsylvania, Ohio, West Virginia, New Jersey and Mississippi.
Scrap metal exports from the U.S. dropped 4.7% by volume in the first half of 2015 compared to the first half of 2014, according to statistics gathered and summarized by the Journal of Commerce. Exports are expected to fall more by the end of 2015 if the U.S. dollar remains strong.
