Sims signs deal to dispose of UK unit

Written by CRU

Global recycler Sims Limited has conditionally agreed to sell its UK Metal (UKM) business to focus on more profitable regions.

London-headquartered recycler Unimetals Group is acquiring 28 sites, including four shredders and three ports, for approximately $248 million, subject to a net asset value adjustment on closure. Conclusion is expected by the end of September, provided regulatory and customary completion conditions are met.

“We conducted a comprehensive strategic review of UKM … The board concluded that a sale provided the optimal outcome for Sims and its shareholders,” CEO and managing director Stephen Mikkelsen said in an Australian Securities Exchange (ASX) filing.

“By focusing on high-potential markets such as the United States, Australia and New Zealand, where our business position and demand for scrap are stronger, we can effectively leverage our strengths and drive sustainable growth.”

UKM’s shipments represented about 14% of Australia-based Sims Metal’s total sales volumes in the financial year ending last June.

Sims also announced it has signed a letter of intent to sell its remaining interest in CLP Circular Services for about $32 million, subject to due diligence, which is expected to be completed by the end of September. The business was previously called Sims Municipal Recycling of New York.

The two transactions are likely to yield Sydney-headquartered Sims $285 million to initially strengthen the company’s balance sheet and, later, grow a refocused business and fund returns to shareholders, said Mikkelsen.

The UKM and Circular Services sales would conclude a divestment program began in 2022, he added.