Commercial Metals Company Buys Metal Recycling Company Roane

The acquisition will boost Commercial Metals’ steelmaking operations' security and supply of competitively priced inputs.

SEATTLE (Scrap Monster): Commercial Metals Company CMC announced that it acquired Roane Metals Group LLC, a Tennessee-based metal recycling company.

Roane operates two facilities, with a combined processing capacity of around 85,000 tons of ferrous and non-ferrous materials. The company purchases ferrous and non-ferrous scrap metal from the general public, and industrial and commercial scrap metal sellers. A large bulk of volumes is for obsolete ferrous scrap grades used by Commercial Metals’ long product mills.

The acquisition will boost Commercial Metals’ steelmaking operations' security and supply of competitively priced inputs.

The financial terms of the acquisition have not yet been disclosed.

Commercial Metals has been gaining from its acquisitions. As part of its strategic initiatives to boost growth, CMC has been active on the acquisition front.

In November 2022, Commercial Metals completed the acquisition of a Galveston area metals recycling facility and related assets from Kodiak Resources, Inc. and Kodiak Properties, L.L.C.  The acquired operation annually processes approximately 55,000 tons of ferrous and non-ferrous materials, with the majority of volumes related to obsolete ferrous scrap grades consumed by Commercial Metals’ long product mills.  Similar to Roane, the buyout was expected to enhance the security and supply of competitively priced inputs to the company’s steelmaking operations.

In September 2022, the company acquired Advanced Steel Recovery, LLC (ASR), a leading supplier of recycled ferrous metals in Southern California. This acquisition supports the company's strategic expansion plans in the Western United States.

In April 2022, the company acquired Tensar Corporation, which added a highly-attractive growth platform to the company. It is expected to make Commercial Metals a unique provider of value-added reinforcement solutions for the domestic and international construction markets.

After the first quarter of fiscal 2023 (ended Nov 30, 2022), Commercial Metals’ total liquidity was $1.5 billion. The company’s strong liquidity, financial position and focus on reducing debt by strategic capital allocation approach will open additional acquisition opportunities.

The company reported adjusted earnings per share of $2.24 in first-quarter fiscal 2023, beating the Zacks Consensus Estimate of $1.99. The bottom line rose 38.3% from the prior-year quarter’s earnings per share of $1.62. Net sales in the reported quarter were $2,227.3 million, up 12.4% from the year-ago quarter’s $1,981.8 million. The reported figure surpassed the Zacks Consensus Estimate of $2,164.5 million.

Courtesy: www.nasdaq.com