SYDNEY, AUSTRALIA: Sims Limited, a global leader in metal recycling, announced today that it has entered into a definitive agreement to acquire the assets of Baltimore Scrap Corp (BSC), one of the largest metal recyclers in the United States Northeast.

The deal is expected to close in October 2023, subject to regulatory approvals and other customary closing conditions.

BSC operates 17 facilities across five states – Maryland, Virginia, Pennsylvania, New York, and New Jersey – with annual sales volumes of approximately 600,000 tonnes. BSC’s operations include four shredders and extensive rail, barge and port infrastructure, which enable it to serve both domestic and export markets. BSC produces high-quality ferrous and non-ferrous scrap metal products that meet the growing demand from steel mills, foundries, smelters and other customers.

The total consideration for the acquisition is US$177 million, plus working capital and other adjustments to be determined at closing. The transaction implies an EV/EBITDA multiple of 5.4x on a three year trailing average, pre-synergies basis. On an equivalent post-synergies basis, the EV/EBITDA multiple is forecasted to reduce to 4.2x.

The acquisition is consistent with Sims Limited’s strategy to grow its core metal recycling business in large markets, by operating best-in-class assets and producing differentiated outputs, with efficient logistic channels to an expanding customer base.

Sims Limited CEO and Managing Director Alistair Field said: “Baltimore Scrap Corp is a company we have admired for many years, with a strong management team that has built an excellent business over many years. This acquisition is a highly complementary fit with Sims’ strategy to expand our metal recycling business in North America, and increase our diversity of sales channels to growing US domestic demand for ferrous and non-ferrous scrap metal. I welcome the Baltimore Scrap Corp team and its group of affiliates to the Sims family.”

Stephen Mikkelsen, Group CFO of Sims Limited, added: “The BSC acquisition is another example of Sims’ capital recycling strategy. We anticipate the acquisition to be substantially funded through the redeployment of proceeds from non-core asset sales and other assets that are not likely to achieve their required rate of return.”

Sims Limited is a global leader in metal recycling, with operations in Australia, New Zealand, North America and Europe. Sims Limited recycles more than 10 million tonnes of metal annually and employs over 6,000 people across 250 sites. Sims Limited is listed on the Australian Securities Exchange (ASX: SGM) and is a member of the S&P/ASX 200 index. For more information, visit [Sims Limited website].

Baltimore Scrap Corp is one of the largest metal recyclers in the United States Northeast, with operations in Maryland, Virginia, Pennsylvania, New York, and New Jersey. Baltimore Scrap Corp recycles more than 600,000 tonnes of metal annually and employs over 400 people across 17 sites. Baltimore Scrap Corp is a privately held company headquartered in Baltimore, Maryland.

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