Signature Group Holdings, Inc. has completed the acquisition of the Global Recycling and Specification Alloys (GRSA) business of Aleris Corporation for $525 million.
Signature will operate the business going forward as “Real Alloy.”
Real Alloy becomes the world’s largest independent aluminum recycler, converting aluminum scrap and dross into high quality aluminum for end use in the automotive and aerospace manufacturing, food and beverage packaging, and building and construction industries. Its customers are automotive manufacturers and their tier one and tier two suppliers and aluminum rolling mills in the U.S., Canada, Mexico and Europe. Real Alloy enjoys economies of scale and the lead market share in third party aluminum recycling in North America and Europe.
Terry Hogan, senior vice president of GRSA’s North America division has been named president of Real Alloy. Russell Barr, vice president of GRSA’s European operations will serve as executive vice president of Real Alloy Europe, also effective February 27, 2015.
This deal is transformative for Signature, as it follows through on its publicly announced strategy to become a stable, strategic investor focused on sectors that include transportation, food, water and energy. As a result of the deal, the company expects its annual revenues will increase from less than $50 million to approximately $1.5 billion, with significantly positive free cash flow.
A Signature subsidiary issued publicly traded notes of $305 million, and along with arranging for working capital facilities aggregating $175 million, Signature contributed over $180 million of equity into Real Alloy to complete the transaction and pay closing fees. Signature previously announced that it had raised equity capital for the transaction.
Published in the April 2015 Edition of American Recycler News