Dive Brief:
- Signature Group Holdings Inc. has inked a deal to acquire Aleris Corporation’s aluminum recycling unit from Global Recycling and Specification Alloys.
- An anticipated increase in aluminum demand from car makers paved the way for the $525 million agreement.
- Global Recycling operates 18 plants across North America, and six in Europe.
Dive Insight:
Aleris has been looking to sell the privately-held company since April, when analyst estimates pegged the potential sale at more than $400 million. Craig Bouchard, the Chief Executive of Signature, said the largest growth opportunity for the business lies in automotive plants, saying, “We’re trying to take advantage of a mega-trend.”
Global Recycling facilities are positioned within close proximity to auto factories. The plants are expected to produce more aluminum scrap, according to Bradford Research analyst and President Charles Bradford. "Most of the aluminum in cars today is mainly made from scrap," explained Bradford.