Sims Sells UK Metal Recycling Business to Unimetals for £195 Million
Sims, a prominent metal recycling company valued at $2 billion, has sold its UK operations to Unimetals Group for approximately £195 million ($377 million). The announcement was made after the market closed in Australia on Monday.
Under the terms of the deal, Unimetals will acquire 28 facilities, including three port facilities and four shredders. The UK business accounted for about 14% of Sims' sales volumes in the 2024 financial year. Going forward, Sims will focus on its operations in Australia, New Zealand, North America, and its 50% stake in the South Australian Recycling Joint Venture.
The transaction was facilitated by Macquarie Capital and Eversheds Sutherland, with Sims also announcing plans to sell CLP Circular Services Holdings for around $32 million.
This divestment is part of Sims' strategic shift towards markets with stronger business positions and higher demand for scrap metal. The sale process, which began early in the year, attracted interest from major European steel industry players, including TSR, Schnitzer Steel, Derichebourg, and EMR.
Sims UK has proven attractive to buyers aiming to leverage the growing emphasis on recycling. For the fiscal year ending June 2023, Sims UK reported earnings before interest, tax, depreciation, and amortization (EBITDA) of $36.5 million, down from $95 million in fiscal 2022. The decrease in earnings was attributed to challenging market conditions and intense competition for shredder infeed.
The sale price for Sims UK was anticipated to be between five and ten times its EBITDA. Sims announced the strategic review on November 22 after receiving interest from potential buyers.
Sims' scrap metal is used in the production of low-carbon steel, copper, and aluminum. Sims UK Metal, which produces over 1.4 million tonnes of scrap metal annually, is one of the leading scrap metal suppliers in the region.
