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Cobaltum Partners Advises Aceros Arequipa on the Acquisition of Port Manatee Scrap Metal

Cobaltum Partners Advises Aceros Arequipa on the Acquisition of Port Manatee Scrap Metal

Cobaltum Partners Advises Aceros Arequipa on the Acquisition of Port Manatee Scrap Metal
Overview of Transaction:
  • July 13, 2021 – Corporación Aceros Arequipa S.A. (“CAASA”), the largest steel producer in Peru, has acquired Port Manatee Scrap Metal, Inc (“PM”) and St. Pete Scrap Metal, LLC (“SP”).  CAASA expects to supply itself with 100,000 tons of ferrous scrap metal per year from the Florida operations
  • The acquisition significantly expands CAASA’s international scrap metal sourcing capacity, vertically integrating a strategic source of supply for its new 1.25 million TM/year production facility in Pisco, Peru    
  • PM operates a ferrous scrap metal recycling facility located in Manatee County, Florida.  The company sources, collects, transports, processes, and markets scrap metal collected from industrial clients and scrap metal dealers.  The acquisition includes St. Pete Scrap Metal, a collections site that purchases ferrous and non-ferrous metals from peddlers and metal dealers, strategically located in St. Petersburg, Florida 
  • Founded in 1964, CAASA is the leading Peruvian manufacturer of rebar, construction wire rod, merchant bars, and other steel by-products with operations in Peru, Bolivia, Colombia and Chile. CAASA sells steel products throughout the Americas with an installed capacity of 1.3 million TM/year finished products
Strategic Rationale:
  • Vertical Integration: Significantly expands and diversifies CAASA’s proprietary international scrap metal sourcing capabilities, a key initiative of the company’s strategic plan  
  • Access to the US Market: The US is the largest generator of scrap metal in the world and a key source of raw material for CAASA.  The acquisition provides a reliable source of supply, at attractive terms, for the company’s newly inaugurated 1.25 million TM/year plant in Pisco, Peru 
  • Attractive Valuation: CAASA acquired this strategically positioned asset at an attractive entry valuation relative to performance (before accounting for synergies)
Cobaltum Role / Results:
  • Cobaltum acted as the exclusive strategic and financial advisor to Aceros Arequipa
  • Cobaltum advised CAASA in the negotiation, structuring and execution of the acquisition of PM from the Grimmel family
  • Cobaltum negotiated an attractive purchase price for PM, and managed to preserve it in absolute terms in the context of strong FY’20 and 1H’21 operating performance, locking-in an attractive entry valuation for our client
  • Cobaltum was instrumental in achieving a successful closing, managing a complex transaction under highly challenging conditions, including the COVID-19 pandemic