Aleris to sell its recycling and specification alloy businesses to Signature Group Holdings

Aleris announced today that it has signed a definitive agreement to sell its North American and European Recycling and Specification Alloys businesses to an affiliate of Signature Group Holdings. The sale includes 18 production facilities in North America and six in Europe. The facilities offer a wide range of metal recycling services and specification alloy products. Signature has agreed to pay an aggregate of $525 million for the businesses in the form of $465 million in cash with the remainder in cash and preferred shares of Signature Group Holdings, subject to customary post-closing adjustments. Aleris' decision to divest the businesses follows a strategic review process that was announced in April.

"The sale of the recycling and specification alloys businesses will result in a stronger, more focused Aleris that will have greater flexibility to concentrate resources in the areas with the highest growth potential," Steve Demetriou, Aleris chairman and CEO said. "We have made a number of significant investments in our rolled products business over the past few years to serve the automotive, aerospace, and building and construction industries, and remain committed to strengthening our position in these key markets."

The company's rolled products business has been the focal point for numerous growth initiatives. Aleris recently announced the expansion of its Lewisport, Kentucky, facility to serve the global automotive industry, and earlier this year completed the acquisition of Nichols Aluminum, which included four rolled products facilities in North America that serve a variety of industries including building and construction. Last year, the company unveiled its world-class aerospace plate mill in Zhenjiang, China, and a new automotive facility in Duffel, Belgium.

"The recycling and specification alloys businesses are profitable businesses led by a talented leadership team that have delivered strong operational performance. We are pleased that we have found a buyer that we believe will be an exceptional partner for the future growth of these businesses, and look forward to maintaining a strong commercial relationship as they will continue to be an important supplier for Aleris," Demetriou added.

The transaction is expected to close in the coming months following customary regulatory approvals and closing conditions. The company remains committed to providing the highest level of service to its recycling and specification alloys customers through the transition period.

Credit Suisse and KeyBanc Capital Markets, Inc. acted as financial advisors to Aleris. Fried, Frank, Harris, Shriver and Jacobson, LLP acted as legal advisors.