Cleveland-Cliffs Inc. (NYSE: CLF) has entered into a definitive agreement to acquire Ferrous Processing and Trading Company, including certain related entities, for a total enterprise value of approximately $775 million, on a cash-free, debt-free basis and subject to customary adjustment. Based in Detroit, FPT is among the largest processors and distributors of prime ferrous scrap in the United States, representing approximately 15% of the domestic merchant prime scrap market. FPT currently processes approximately three million tons of scrap per year, approximately half of which is prime grade.
FPT operates 22 scrap processing facilities, with approximately 90% of revenues originating from its Midwest locations, primarily in Michigan and Ohio. In the trailing twelve months ended August 31, 2021, FPT generated EBITDA of approximately $100 million. FPT already enjoys an outsized position in automotive and industrial scrap, which is expected to grow as part of Cleveland-Cliffs. FPT was Fastmarkets’ 2019 winner of Scrap Company of the Year.
The acquisition has been approved by the board of directors of Cleveland-Cliffs and is expected to close in the fourth quarter of 2021, subject to the receipt of regulatory approval and the satisfaction of other customary closing conditions.