Metalico Secures $100 Million Private Placement

Metalico Inc., based in Cranford, N.J., has entered into a definitive purchase agreement with institutional accredited investors to raise $100 million of gross proceeds in a private placement of 7 percent notes that are convertible into shares of Metalico’s common stock and warrants that are exercisable for shares of the company’s common stock.

Metalico has also purchased a family-owned, multi-yard fully integrated scrap metal recycling operation based in Western Pennsylvania with yards in West Virginia. The company used a portion of the private placement funds, approximately $69 million according to an earlier announcement, to purchase the operations of The Snyder Group.

The total purchase price for the acquisition was $76 million (subject to additional closing adjustments based on the value of the inventory on hand), $69 million of which was paid in cash and $7 million of which was in shares of Metalico’s common stock

In an 8-K report filed on April 23, Metalico noted that The Snyder Group handles approximately 300,000 tons of scrap metal at five yards in the Pittsburgh area, including Grand Avenue Inc., Assad Iron & Metals, Heidelberg Metals Inc. (dba Neville Metals), Neville Recycling LLC and Platt Properties LLC. The five yards include one platform facility and four feeder yards.

The Snyder Group produces nearly 1 million pounds of nonferrous scrap per month and operates an automobile shredder that processed more than 100,000 tons of scrap in 2007. Its main location includes barge access on the Ohio river and on-site rail service.

The acquired company will be operated and managed as Metalico Neville Inc. by James Snyder, Charles Snyder and Daniel Snyder, the former owners.

Metalico says it intends to use the remaining net proceeds from the private placement to fund potential acquisitions and for working capital.