DEFA14A: Radius Recycling to be Acquired by Toyota Tsusho Corporation Subsidiary

Radius Recycling, Inc. has entered into an agreement to be acquired by a U.S. subsidiary of Toyota Tsusho Corporation (TTC), with the transaction expected to close in the second half of calendar year 2025.

Summary

• Radius Recycling, Inc. has agreed to be acquired by a U.S. subsidiary of Toyota Tsusho Corporation (TTC).
• The acquisition is expected to close in the second half of calendar year 2025, pending shareholder and regulatory approvals, and other customary conditions.
• Post-acquisition, Radius Recycling will continue to operate with its existing teams, facilities, headquarters, strategy, and brands.
• TTC is committed to honoring all collective bargaining agreements and compensation and benefits programs for Radius employees.
• The Radius Board of Directors has already approved the transaction.
• The company emphasizes that it is business as usual until the transaction closes and they will continue to operate independently.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the acquisition announcement, which is expected to bring investment and growth opportunities. However, the presence of forward-looking statements and associated risks tempers the overall sentiment.

Positives

• TTC's acquisition is expected to provide Radius Recycling with greater investment capabilities for growth.
• TTC is committed to maintaining existing collective bargaining agreements and employee benefits.
• Radius Recycling will continue to operate under its existing brand and strategy.
• The acquisition has been approved by the Radius Board of Directors.

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 come with conditions.
• The stock price of Radius Recycling, Inc. prior to the consummation of the proposed transaction could be impacted.
• The satisfaction of the closing conditions to the proposed transaction is not guaranteed.
• 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 or delays in realizing expected benefits from capital and other projects could occur.
• Cyclicality and impact of general economic conditions could affect the company.
• Inflation, interest rate, and foreign currency fluctuations could have an impact.
• Changing conditions in global markets including the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions could affect the company.
• Economic and geopolitical instability including as a result of 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 affect the company.
• Significant decreases in recycled metal prices could have an impact.
• Imbalances in supply and demand conditions in the global steel industry could affect the company.
• 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 affect the company.
• 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 affect the company.
• The impact of pandemics, epidemics, or other public health emergencies could have an impact.
• Inability to achieve or sustain the benefits from productivity, cost savings, and restructuring initiatives could occur.
• Inability to renew facility leases could have an impact.
• Customer fulfillment of their contractual obligations is not guaranteed.
• The impact of consolidation in the steel industry could affect the company.
• Product liability claims could have an impact.
• The impact of legal proceedings and legal compliance could affect the company.
• The impact of climate change could have an impact.
• The impact of not realizing deferred tax assets could affect the company.
• The impact of tax increases and changes in tax rules could affect the company.
• The impact of one or more cybersecurity incidents could have an impact.
• The impact of increasing attention to environmental, social, and governance matters could affect the company.
• Translation risks associated with fluctuation in foreign exchange rates could have an impact.
• The impact of hedging transactions could affect the company.
• Inability to obtain or renew business licenses and permits could have an impact.
• Environmental compliance costs and potential environmental liabilities could affect the company.
• Increased environmental regulations and enforcement could have an impact.
• Compliance with climate change and greenhouse gas emission laws and regulations could affect the company.
• The impact of labor shortages or increased labor costs could affect the company.
• 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 affect the company.

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. Post-acquisition, Radius Recycling will continue to operate as it has in the past.

Management Comments

• Upon completion of the transaction, we will continue to operate as we have in the past, with our teams, including the members of your union, our operating facilities, our headquarters, our strategy, and our brands retained.
• TTCs support will provide Radius with a greater ability to invest in the continued development and overall growth of Cascade along with our metals and auto recycling platform.
• Importantly, our agreement with TTC does not change how we work with you or your members.
• TTC recognizes that Cascade is core to our success.
• Maintaining who we are and what we do is very important to TTC and to the success of this transaction.
• We are confident that Cascade employees, and particularly members of your union, will have even more opportunities as part of TTCs larger organization.

Industry Context

The acquisition reflects a trend of consolidation and strategic investment in the recycling industry, with larger corporations seeking to expand their presence in the circular economy and secure access to recycled materials.

Comparison to Industry Standards

• Toyota Tsusho Corporation's acquisition of Radius Recycling is similar to other strategic acquisitions in the recycling industry, such as Waste Management's acquisition of Advanced Disposal Services, which aimed to expand market share and service offerings.
• The deal aligns with the broader industry trend of large corporations investing in recycling and sustainability initiatives, as seen with companies like Republic Services and Veolia Environnement.
• Compared to global benchmarks, the acquisition reflects a growing emphasis on circular economy models, similar to initiatives undertaken by companies like Umicore and Sims Metal Management, which focus on resource recovery and recycling technologies.

Stakeholder Impact

• Shareholders will have the opportunity to vote on the proposed acquisition.
• Employees are assured that their collective bargaining agreements and compensation/benefits will be honored.
• Customers can expect continued service and operations as usual.
• Communities where Radius Recycling operates can anticipate continued support and investment.

Next Steps

• Shareholder approval of the acquisition.
• Receipt of required regulatory approvals.
• Completion of other customary closing conditions.
• Continued operation of Radius Recycling independently until the transaction closes.

Key Dates

Keywords

acquisition, Toyota Tsusho Corporation, Radius Recycling, recycling, merger, metals, circular economy