DEFA14A: Radius Recycling to be Acquired by Toyota Tsusho Corporation in All-Cash Deal

Radius Recycling has agreed to be acquired by a U.S. subsidiary of Toyota Tsusho Corporation (TTC) in an all-cash transaction for $30.00 per share.

Summary

• Radius Recycling has entered into an agreement to be acquired by a U.S. subsidiary of Toyota Tsusho Corporation (TTC) in an all-cash transaction.
• Upon completion of the transaction, Radius Recycling will continue to operate as it has in the past, retaining its teams, facilities, headquarters, strategy, and brands.
• TTC is an affiliate of the Toyota Group and is a leader in metals and automotive recycling.
• The acquisition will enable Radius Recycling to invest in its metals recycling platform, Pick-N-Pull auto recycling business, 3PR recycling services and solutions, and Cascade electric arc furnace and rolling mill.
• Radius Recycling shareholders will receive $30.00 per share in cash upon closing of the transaction.
• This represents an approximate 115% premium to Radius' unaffected closing share price on March 12, 2025.
• The transaction is expected to close in the second half of calendar year 2025, subject to shareholder and regulatory approvals, and other customary closing conditions.

Sentiment

Score: 9

Explanation: The document conveys a highly positive sentiment due to the significant premium offered to shareholders, the strategic benefits of the acquisition, and the commitment to employees and communities. The acquisition by a strong player like Toyota Tsusho Corporation is a very positive development.

Positives

• Shareholders will receive a significant premium of 115% over the unaffected share price.
• Radius Recycling will benefit from TTC's financial strength, U.S. footprint, recycling technology, and experience in the automotive sector.
• The acquisition will allow Radius Recycling to expand its partnerships with metals consumers, automotive OEMs, and suppliers.
• Radius Recycling will gain access to recycling technologies that increase metal recovery and reduce landfill waste.
• TTC is committed to honoring collective bargaining agreements and compensation and benefits programs for Radius Recycling employees.
• TTC values Radius Recycling's community engagement and is committed to supporting its initiatives.

Risks

• The completion of the proposed transaction is subject to various risks and uncertainties.
• Required approvals from shareholders and regulatory bodies may not be obtained or may be delayed.
• The stock price of Radius Recycling, Inc. prior to the consummation of the proposed transaction could fluctuate.
• Closing conditions to the proposed transaction may not be satisfied.
• There are potential environmental cleanup costs related to the Portland Harbor Superfund site or other locations.
• Equipment upgrades, equipment failures, and facility damage could impact production.
• Failure to realize expected benefits from capital and other projects could occur.
• Cyclicality and general economic conditions could have an impact.
• Inflation, interest rate, and foreign currency fluctuations could have an impact.
• Changing conditions in global markets, including sanctions, tariffs, and trade actions, could have an impact.
• Economic and geopolitical instability, including military conflict, could have an impact.
• Volatile supply and demand conditions affecting prices and volumes in the markets for raw materials and other inputs could have an impact.
• Significant decreases in recycled metal prices could have an impact.
• Imbalances in supply and demand conditions in the global steel industry could have an impact.
• Difficulties associated with acquisitions and integration of acquired businesses could occur.
• Supply chain disruptions could have an impact.
• Reliance on third-party shipping companies, including with respect to freight rates and the availability of transportation, could have an impact.
• Restrictions on our business and financial covenants under the agreement governing our bank credit facilities could have an impact.
• Potential limitations on our ability to access capital resources and existing credit facilities could occur.
• The impact of impairment of goodwill and assets other than goodwill could occur.
• The impact of pandemics, epidemics, or other public health emergencies could occur.
• Inability to achieve or sustain the benefits from productivity, cost savings, and restructuring initiatives could occur.
• Inability to renew facility leases could occur.
• Customer fulfillment of their contractual obligations may not occur.
• The impact of consolidation in the steel industry could occur.
• Product liability claims could have an impact.
• The impact of legal proceedings and legal compliance could occur.
• The impact of climate change could occur.
• The impact of not realizing deferred tax assets could occur.
• The impact of tax increases and changes in tax rules could occur.
• The impact of one or more cybersecurity incidents could occur.
• The impact of increasing attention to environmental, social, and governance matters could occur.
• Translation risks associated with fluctuation in foreign exchange rates could occur.
• The impact of hedging transactions could occur.
• Inability to obtain or renew business licenses and permits could occur.
• Environmental compliance costs and potential environmental liabilities could occur.
• Increased environmental regulations and enforcement could occur.
• Compliance with climate change and greenhouse gas emission laws and regulations could occur.
• The impact of labor shortages or increased labor costs could occur.
• Reliance on employees subject to collective bargaining agreements could have an impact.
• The impact of the underfunded status of multiemployer plans in which we participate could occur.

Future Outlook

The transaction is expected to close in the second half of calendar year 2025, subject to shareholder and regulatory approvals, and other customary closing conditions. Radius Recycling will continue to operate independently until the transaction closes.

Management Comments

• With TTCs support, we will have a greater ability to invest in the continued development of our metals recycling platform.
• TTC recognizes that Radius team is core to our success and is committed to honoring collective bargaining agreements and compensation and benefits programs for our employees.
• We are confident that, as part of TTCs larger organization, Radius employees will have even more opportunities as we work together to increase recycling and expand the circular economy.

Industry Context

The acquisition reflects the growing demand for recycled metals and the increasing importance of the circular economy. Toyota Tsusho Corporation's interest in Radius Recycling highlights the strategic value of companies with established recycling platforms and technologies.

Comparison to Industry Standards

• Toyota Tsusho Corporation's acquisition of Radius Recycling is similar to other strategic acquisitions in the recycling industry, where larger companies seek to expand their capabilities and market presence.
• Comparable companies in the metals recycling industry include Sims Metal Management and Schnitzer Steel Industries, which have also pursued acquisitions to grow their businesses.
• The 115% premium offered to Radius Recycling shareholders is a significant premium, suggesting that Toyota Tsusho Corporation sees substantial value in the company's assets and operations.

Stakeholder Impact

• Shareholders will receive a significant premium for their shares.
• Employees will have more opportunities as part of a larger organization.
• Customers will benefit from enhanced products and services.
• Communities will benefit from TTC's commitment to community engagement.

Next Steps

• Radius Recycling shareholders need to approve the transaction.
• Regulatory approvals need to be obtained.
• The transaction is expected to close in the second half of calendar year 2025.

Key Dates

Keywords

acquisition, Toyota Tsusho Corporation, Radius Recycling, recycling, metals, shareholders, transaction, premium, circular economy