Radius to be acquired by Toyota subsidiary

Radius Recycling has announced it is being acquired by Toyota Tsusho America Inc. (TAI), a subsidiary of Japanese company Toyota Tsusho Corp. (TTC) that is part of the larger Toyota Group.

Radius changed its name from Schnitzer Steel Industries Inc. in 2023, when it set aside the family name of Sam Schnitzer, who founded the metals recycling firm in 1906, to better reflect its vision, purpose and impact on the global circular economy.

The Portland, Oregon-based company operates a network of scrap recycling and auto salvage facilities as well as one scrap-fed electric arc furnace (EAF) steel mill, which is in Portland.  

Radius Recycling has agreed to the transaction after experiencing six consecutive fiscal quarters of financial losses. During that time, executives consistently referred to challenging industry conditions as a factor.

The definitive merger agreement will see the TAI acquiring all shares of Radius for $30 per share in cash, representing an approximate 115 percent premium to Radius’ closing share price March 12.

Upon completion of the transaction, Radius will continue to operate from its current headquarters in Portland and says it will retain its teams, operating facilities, strategy and brands retained.

“The transaction brings together two companies dedicated to advancing the circular economy by increasing recycling and reducing waste across the industrial, manufacturing and retail sectors," Radius says.

TTC is a Japanese trading company headquartered in Nagoya and Tokyo with approximately $65 billion in global revenue and 70,000 employees worldwide. Radius says TTC is “a proven leader" in metals and automotive recycling with a successful track record of acquisitions with meaningful investments in the growth and employees of those companies.

In the United States, TTC and TAI operate a Georgetown, Kentucky-based subsidiary called Green Metals Inc. that has about 20 U.S. locations focusing on collecting and processing recyclable metals generated at Toyota automotive and components manufacturing plants. It also operates secondary smelters in Missouri and Tennessee under the name MOST (Missouri Smelting Technology) Inc.   

TAI is a joint venture partner with St. Louis-based Alter Trading Corp. on the Altech Recycling plant in North Little Rock, Arkansas, designed to produce a high-purity shredded aluminum scrap grades that can be used to make new Toyota vehicle parts.

Radius says its sale to TAI and TTC will provide it with an opportunity to benefit from TTC’s financial strength, recycling technology and experience in providing recycling services to the automotive sector.

“We are excited to have reached this agreement with TTC, which builds on our longstanding relationship and provides us with increased opportunities for our talented team, broader products and services for our suppliers, customers and communities and an expanded platform for our more than 100 operating sites while delivering significant immediate value to our shareholders,” Radius CEO Tamara L. Lundgren says.

“Like Radius, TTC is a proven leader in metals and automotive recycling services and solutions, and we look forward to enhancing and expanding our offerings as part of their larger organization while continuing to drive our strategy forward."

Radius says that with TTC’s financial support, it will have a greater ability to invest in the continued development of its metals recycling and sorting platform, its Pick-N-Pull auto recycling business, its third-party recycling services and its EAF mill in Portland.

The firm also expects to benefit from TTC’s relationships with automotive original equipment manufacturers and Tier 1, 2 and 3 suppliers, enabling Radius to “expand its opportunities to partner with metals consumers.”

“TTC is committed to investing in the development of Radius’ infrastructure and manufacturing capabilities across its operating sites, with the goal of growing and diversifying Radius’ platform over the long-term,” Radius adds.

The company expects the transaction to close in the second half of this year, subject to approval by its shareholders, regulatory approvals and other closing conditions.

Goldman Sachs & Co. LLC is serving as lead financial advisor, J.P. Morgan Securities LLC is serving as co-advisor and Simpson Thacher & Bartlett LLP is serving as legal counsel to Radius.

Mizuho Securities Co. Ltd. is acting as financial advisor and White & Case LLP is serving as legal counsel to TTC.

“We look forward to collaborating with Radius, whose position as one of North America’s leading recycling companies aligns with our efforts to holistically improve recycling across the supply chain," TTC President and CEO Ichiro Kashitani says. "Together, we will strengthen, amplify and grow Radius’ robust networks and integrated operations, better positioning Radius to meet the rapidly increasing demand to improve recycling rates and value recovery and deliver long-term benefits to employees, customers, suppliers and communities.