Photo: Metallo

Aurubis to acquire Metallo Group

In pursuit of its recycling strategy, Aurubis AG, Hamburg, Germany, signed a share purchase agreement May 22 for the acquisition of the Belgian-Spanish Metallo Group.

Metallo Holdings is owned by funds managed by TowerBrook Capital Partners, a leading transatlantic investment firm. Metallo is a recycling and refining company that specializes in recovering nonferrous metals by recycling materials with lower metal content. The company employs 530 people at locations in Belgium and Spain. In fiscal 2018, Metallo generated revenue of approximately 1 billion euros, or $1.12 billion. The share purchase agreement stipulates a purchase price of 380 million euros, or $426 million, which will be financed without a capital increase, according to a press release from Aurubis.

The acquisition of Metallo strengthens Aurubis’ metal portfolio, especially in the key metals of copper, nickel, tin, zinc and lead, Aurubis says. The Metallo Group complements the investment project Future Complex Metallurgy (FCM), with which Aurubis will process a higher volume of complex input materials.

Jürgen Schachler, the former chairman of the executive board who left Aurubis at the end of June, adds, “Due to megatrends such as smart homes, e-mobility, digitalization and renewable energies, both the quantity and the complexity of secondary raw materials will increase significantly. Metallo’s processing expertise and specific metallurgical know-how provide an excellent complement to Aurubis’ own strengths.”

Metallo Belgium, based in Beerse, was founded in 1919. In the 1960s, the company developed processes to recycle copper, tin and lead from more complex raw materials with low metal content. Metallo Spain, formerly called Elmet, was founded in Berango (in the province of Biscay) in 1991.

Patrick Verschelde, executive chairman of the board of directors of Metallo, says, “We are dedicated to developing and creating sustainable processes and strategies, and we have been a longstanding business partner of Aurubis. We are pleased to now become part of the Aurubis family, and we look forward to successfully working on sustainable solutions together as one team in the future.”

Big River Steel closes on financing deal

Big River Steel (BRS), Osceola, Arkansas, has closed on a $487 million debt financing package, which will go toward 30 years of bonds to finance the expansion of its scrap metal recycling and flat-rolled production facility, doubling its capacity to 3.3 million tons per year. The bonds, which are interest-only for the next 20 years, were priced at par with a coupon of 4.5 percent and traded in the when-issued market as high as 103 to yield 4.14 percent.

The company also announced another $290 million in equity financing, provided on a pro rata basis by BRS’ current ownership group, which includes a Koch family investment vehicle, a Goldman Sachs-led group and the Arkansas Teacher Retirement System (ATRS).

The bond and equity proceeds set the stage for an incremental downstream investment, which will allow the company to produce even higher grades of electrical steel as demand for hybrid and electric vehicle production is expected to escalate, BRS says in a news release.

“The level of interest shown by the bond investor community in supporting Big River Steel’s long-term growth is much appreciated and is a testament to the outstanding effort put forth by our employees in meeting the needs of our customers,” says BRS Director of Finance Ari Levy. “Our ability to quickly penetrate several of the most demanding steel markets, including directly selling to a number of the world’s leading automakers, was a significant factor leading to our success in issuing what we believe to be the longest maturity bonds in the North American steel industry,” he adds.

BRS’ Osceola plant produces tube-grade sheet for pipeline construction, silicon steels for a wide variety of energy and electric motor applications and high-strength steels for the U.S. automotive industry. The company has commissioned SMS Group, Düsseldorf, Germany, to supply mechanical equipment, electrical and automation systems and digitalization for the project.

After the expansion is completed, BRS will have two electric arc furnaces (EAFs) and two twin-ladle furnaces.