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PORTLAND, Ore. - Radius Recycling Inc. (NASDAQ: RDUS), a prominent North American recycling company with a current market capitalization of $386 million, has agreed to a definitive merger with Toyota Tsusho America, Inc. (TAI), the U.S. subsidiary of Toyota Tsusho Corporation (8015.T), in a deal valued at approximately $1.34 billion. Under the agreement announced today, TAI will acquire all outstanding shares of Radius for $30.00 per share in cash, a premium of roughly 115% over the company’s closing share price on March 12, 2025. According to InvestingPro data, this acquisition comes at a time when Radius maintains a "Fair" overall financial health score, despite facing operational challenges.
This premium also represents a 102% increase over the 90-day volume-weighted average share price, a significant boost for shareholders who have weathered a 26% decline in stock value over the past year. Radius Recycling will continue to operate from its Portland headquarters, retaining its teams, operating facilities, strategy, and brands. InvestingPro subscribers have access to 12 additional key insights about Radius’s financial position and market performance.
The merger unites two entities with a shared commitment to enhancing the circular economy through increased recycling and waste reduction in industrial, manufacturing, and retail sectors. Radius Recycling, operating with a significant debt burden of $582 million and a current ratio of 2.02, has been a key supplier of recycled materials and innovative recycling technologies for over a century, while Toyota Tsusho, part of the Toyota Group, is a global trading company with a strong presence in the metals and automotive recycling industry.
Radius’s CEO, Tamara L. Lundgren, expressed enthusiasm for the merger, citing the opportunity for growth and immediate value to shareholders. Ichiro Kashitani, President and CEO of Toyota Tsusho, highlighted the aligned goals of both companies in improving recycling rates and delivering long-term benefits to stakeholders.
The transaction aims to provide Radius with enhanced financial resources, enabling investments in strategic initiatives such as its metals recycling platform, auto recycling business, and Cascade electric arc furnace and rolling mill. With annual revenues of $2.7 billion and negative free cash flow of $117.5 million, this financial backing comes at a crucial time. TTC’s involvement is expected to diversify Radius’s business opportunities, particularly through its connections with automotive manufacturers and suppliers. For detailed analysis of Radius’s financial position and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
TTC has affirmed its commitment to the employees of Radius, promising to honor existing collective bargaining agreements and compensation programs. The transaction is anticipated to close in the second half of 2025, pending regulatory approvals and approval by Radius shareholders.
Radius Recycling’s advisors for the transaction include Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, with Simpson Thacher & Bartlett LLP providing legal counsel. TTC is advised by Mizuho Securities Co., Ltd. and White & Case LLP.
The information in this article is based on a press release statement.
In other recent news, Radius Recycling’s fourth-quarter 2024 earnings report revealed a significant miss on earnings per share (EPS) expectations, with EPS at -1.33 compared to the anticipated -0.435. Revenue also fell short, coming in at $656.54 million against the forecasted $661.7 million. The company’s consolidated adjusted EBITDA saw improvement, reaching $17 million, up from $9 million in the previous quarter, driven by increased sales volumes across various product lines. Despite these gains, the earnings miss has been a major concern, reflecting negatively on investor confidence. Additionally, Radius Recycling’s net debt stands at $409 million, while it managed to generate a positive operating cash flow of $4 million.
In terms of strategic initiatives, the company is focusing on cost reduction and productivity improvement, with a significant program expected to yield $70 million in annual benefits. The company is also investing in advanced metal recovery technologies, projecting substantial returns in future EBITDA. Radius Recycling is optimistic about the potential benefits from U.S. interest rate reductions and an anticipated increase in manufacturing activity. The company projects its fiscal year 2025 capital expenditures at approximately $80 million, with a focus on growth projects. Looking forward, Radius Recycling remains focused on strategic investments and market conditions to improve its financial performance.
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