The $2bn metal recycling company Sims has offloaded its business in the UK to Unimetals Group for about £195m ($A385m).
The company announced the sale on Monday after the close of market in Australia and will see Unimetals pick up 28 facilities, including three port facilities and four shredders.
The business accounts for about 14 per cent of Sims’s sales volumes in the 2024 financial year, and in the future Sims will include Australia and New Zealand Metal, North America Metal and its 50 per cent interest in the South Australian Recycling Joint Venture.
Advising on the transaction was Macquarie Capital and Eversheds Sutherland.
Sims also announced it intended to sell CLP Circular Services Holdings for about $US32m ($A56m).
The move comes as part of a strategic decision by Sims to focus on high-potential markets where its business position and demand for scrap metal were stronger.
The sale process has been running since at least the start of the year is understood to have attracted big European players in the steel space like TSR, owned by Remondis, Schnitzer Steel, Derichebourg and EMR.
Sims UK has appeal at a time when groups will look to capitalise on the growing move towards recycling.
For the year to June 2023, Sims UK made $36.5m in earnings before interest, tax, depreciation and amortisation, but in fiscal 2022 it generated about $95m in annual EBITDA.
The fall in earnings in fiscal 2023 came amid a period of challenging market conditions, including strong competition for shredder infeed.
Expectations had been the division could sell for somewhere between 5 and 10 times its EBITDA.
Sims announced the plans for a strategic review on November 22 after receiving approaches from prospective buyers.
Its scrap metal is sold for low-carbon steel, copper, and aluminium production.
Sims UK Metal produces more than 1.4 million tonnes of scrap metal annually and is one of the leading scrap metal providers in the region.
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