CHATTANOOGA, Tenn. (December 19, 2011) – FourBridges Capital Advisors today announced the sale of certain assets of Bare Metals Recycling LLC to Gerdau Long Steel North America, a subsidiary of Gerdau SA.
Bare Metals, a scrap metal dealer of ferrous and non-ferrous materials, operates scrap metal recycling facilities in Tennessee and Georgia. Advised by the professionals at FourBridges, Bare Metals sold its Chattanooga operations as well as various assets to Gerdau, a global steel conglomerate based in Porto Alegre, Brazil.
“We are very pleased with the outcome of this deal,” said Bill Welch, president and co-owner of Bare Metals. “Working with FourBridges gave us multiple buyer options, and we achieved the value that we wanted for our operations.”
Welch and co-owner Jerry Mendenhall originally approached FourBridges in early 2010 with the intention of recapitalizing their company. FourBridges worked with Bare Metals to conduct a process called “Bridge to Capital,” which included an assessment of the company’s market value and a forecast of the company’s cash flow. This analysis allowed Bare Metals to determine the amount of capital that would be needed and how such a refinancing could be structured.
“We felt that we could bring in additional equity capital, sell the entire company or sell certain assets,” said Andy Stockett, managing director of FourBridges. “After assessing the company’s capital structure, we determined that selling certain assets of Bare Metals would help Bill and Jerry meet their long-term objectives.”
FourBridges utilized its extensive database to conduct a nationwide search for potential buyers. This included contacting both strategic buyers and private equity groups.
“We received a number of proposals, and we worked with Bill and Jerry to evaluate and compare each of them,” Stockett said. “Ultimately, Gerdau made the best offer and was the best fit for the company.”
The transaction enables Welch and Mendenhall to remain in the scrap metal business and to maintain operations at the company’s Georgia facilities. Additionally, the deal allows Gerdau, which operates in the Americas, Europe and Asia, to continue its expansion into the Southeastern U.S.
“Having experienced financial advisors on our side really gave us an advantage throughout the selling process,” Welch said. “The FourBridges team helped us to determine the type of transaction that was right for Bare Metals, and we were able to close a deal that accomplished our goals in a timely manner.”
About Gerdau SA Gerdau SA is a steel conglomerate headquartered in Porto Alegre, Brazil, with operations in the Americas, Europe and Asia. Gerdau is the top producer of long steel in the Americas and a primary supplier of specialty long steel across the world. As the largest recycler in Latin America, the company transforms millions of metric tons of scrap into steel annually. Gerdau is listed on the stock exchanges of São Paulo, New York and Madrid.
About Bare Metals Recycling LLC Bare Metals Recycling LLC owns and operates scrap metal recycling facilities in Tennessee and Georgia. Established in 2002, Bare Metals deals in ferrous and non-ferrous materials. The company is based in Chattanooga, Tennessee, and operates facilities in Griffin, Georgia, and Greenville, Georgia.
About FourBridges Capital Advisors (Member FINRA/SIPC) FourBridges Capital is a middle market investment banking firm based in Chattanooga, Tennessee, that represents business owners in buying companies, selling companies and accessing capital for growth. The senior professionals at FourBridges have been corporate C-level executives (CEO or CFO), and they leverage their extensive capital markets experience to achieve superior results for their clients.
For more information about this transaction, please contact Andy Stockett at (423)266-6979 or Chris Rowe at (423)266-4630.