Scrap Industry News

PHILIP ACQUIRES MORE SCRAP FIRMS

Philip Services Corp., Hamilton, Ontario, has officially acquired Luria Bros., Cleveland, and has also entered into definitive agreements to acquire the Steiner-Liff Metals group of companies, Nashville, Tenn., and the Southern Foundry Supply group of companies, Chattanooga, Tenn. During their last fiscal years, these companies reported revenue (including brokerage revenue) of $775 million. They process or broker more than 5.4 million tons of ferrous scrap and more than 165 million pounds of nonferrous scrap a year.

The aggregate purchase price to be paid for these businesses is $495.9 million, which includes the assumption of $32.6 million in debt. Part of the purchase price will be satisfied by the issuance of 5.6 million Philip common shares. The Steiner-Liff and Southern Foundry transaction snare expected to close by November 15, subject to regulatory approval.

Upon completion of these transactions, John DiLacqua, the current president of Luria Bros., will become the executive vice president of Philip’s U.S. ferrous operations.

Continuing its spate of acquisitions in the southeastern Unites States, Recycling Industries Inc. (RII), Englewood, Colo., has signed a letter of intent to purchase the assets of Jacobson Metal Co., the largest metals recycler in the greater Norfolk, Va., area. Founded in 1955, Jacobson Metal Co. has annual revenues of approximately $30 million and markets its products to both international and domestic consumers, including Roanoke Steel, Nucor and AmeriSteel.

When the transaction is complete, George Ginsburg, the current president of Jacobson, will join the Recycling Industries team and be responsible for day-to-day management of the Jacobson facility, as well as becoming the president of Recycling Industries’ acquisition subsidiary, Recycling Industries of Chesapeake Inc. The purchase will be financed with a combination of debt and preferred stock.

In related news, Recycling Industries has also signed a letter of intent to purchase the metals recycling business operations of Brenner Iron and Metal Co. and Brenner Steel (a steel fabricator) known together as Brenner Companies Inc., Winston-Salem, N.C. The Brenner Companies have annual revenues of approximately $30 million, and are located 16 miles from the United Metals facility in Kernersville, N.C., which RII has also signed a letter of intent to acquire.

The Brenner Companies acquisition – Recycling Industries’ fourteenth since May 1994 – will increase the company’s annual revenue run rate to approximately $215 million. Michael Brenner, president of Brenner Companies, will offer management continuity to the operation and enter into a multi-year employment contract with RII.

European Union Approves Hazardous Waste Ban

Described by the Bureau of International Recycling (BIR), Brussels, Belgium, as "a grand political gesture but unwitting of the consequences for non-OECD industry," the Council of the European Union has approved an amendment to the Basel Convention banning the export of hazardous waste destined for recycling from OECD countries to non-OECD countries as of December 31. This was done even though the Fourth Conference of the Parties to the Convention (COP4) has been postponed.

"The EU has ratified a ban on exports of hazardous wastes, even though these wastes have not been defined," says Francis Veys, director general of BIR. "The Technical Working Group (TWG) of the Convention, in which BIR has played an active role, has developed lists of hazardous and non-hazardous materials on the basis of scientific evidence. With the postponement of COP4, the Parties to the Convention have not had an opportunity to consider the lists as they stand, or to evaluate the need to further work on definitions."

As a result, the ban might end the export of non-hazardous secondary materials to countries that need them.

GENESIS EQUIPMENT FORMS IN WISCONSIN

A new company, Genesis Equipment & Manufacturing Inc., Superior, Wis., has begun manufacturing a line of hydraulic shear and grapple attachments for excavators. Founded by industry veterans Ken LaBounty, Bruce Bacon, Curt Frahm and Kevin Bakke, the company will design, manufacture and market a line of hydraulic attachments for the scrap recycling, waste handling, demolition and reconstruction industries. In addition, Genesis has established a used shear rebuilding program and sells used shears and other attachments.

KTI ACQUIRES ZAITLIN & SONS

KTI Inc. has acquired I. Zaitlin & Sons, an environmental recycling company based in Biddeford, Maine. Zaitlin operates processing, brokering and storage facilities in Maine and Massachusetts. The acquisition also includes Data Destruction Services Inc. (DDS), a leader in the confidential records destruction industry. The revenue of Zaitlin and DDS in 1996 was approximately $10 million.

The purchase price was $500,000 in cash, 200,000 shares of KTI stock and the assumption of $2.3 million of Zaitlin debt.

Zaitlin handles more than 100,000 tons of recycled materials a year including operations in its brokerage business which buys and sells 70,000 tons of such materials annually throughout the Northeast and Canada.

Earlier this year KTI acquired the assets of Prins Recycling Corp. Prins processes and markets approximately 25,000 tons per month of post consumer recyclables at plants in Boston, Newark and Chicago.