Sims Metal Management Ltd., with headquarters in Sydney and in New York City, says it has agreed to acquire Fletcher Building’s 50 percent share of Sims Pacific Metals for NZ$42 million, excluding working capital adjustments. The transaction takes Sims Metal Management’s ownership of Sims Pacific Metals to 100 percent.
In line with Fletcher Building’s strategy to divest noncore businesses, the decision was made to exit the joint venture and focus the company’s steel division operations on its manufacturing and distribution activities.
Sims Pacific Metals, which is based in Auckland, New Zealand, operates nine facilities in that country, including two metal shredders across the North and South Islands. It was established in 1992 as a 50/50 joint venture between Fletcher Steel and Sims Metals Management. The business is supported by more than 170 employees and handles approximately 350,000 metric tons of ferrous and nonferrous metal recyclables annually.
The acquisition, which was completed June 29, 2018, was fully funded in cash and is expected to be immediately earnings per share (EPS) accretive in fiscal 2019, Sims says.
Commenting on the transaction, Sims Metal Management Group CEO Alistair Field says, “This transaction gives us 100 percent ownership of a highly regarded and strongly performing business which we know well. The acquisition is consistent with a key strategy of disciplined growth through complementary acquisitions in our core markets.”
Managing Director of Australia & New Zealand Metals John Glyde adds, “Sims Pacific Metals is an important part of the Australasian business and has been a successful partnership with Fletcher Building for over 25 years. Moving to full ownership reinforces our commitment to our suppliers and customers both in New Zealand and abroad. The acquisition also provides an opportunity for further development of the current operations while delivering a platform for future growth in the South Pacific.”
Sims Metal Management will report its full-year fiscal results Aug. 24, 2018