RTTNews | Oct 11, 2021 07:07AM EDT

07:06 Monday, October 11, 2021 (RTTNews.com) - Flat rolled steel producer Cleveland-Cliffs Inc. (CLF) on Monday announced its decision to enter into the scarp business by acquiring Ferrous Processing and Trading Company (FPT), including certain related entities, for a total enterprise value of about $775 million.

In the trailing twelve months ended August 31, 2021, FPT had generated EBITDA of about $100 million.

FPT, that operates 22 scrap processing facilities and processes about 3 million tons of scrap per year, of which nearly half is prime grade, represents approximately 15% of the domestic merchant prime scrap market.

The acquisition is expected to close in the fourth quarter of 2021.

"As the largest supplier of flat rolled steel in North America, Cleveland-Cliffs is the main source of the steel that generates prime scrap in manufacturing facilities. Furthermore, throughout our entire footprint, Cleveland-Cliffs also consumes a very significant amount of scrap in our EAFs and BOFs. The acquisition of FPT will enhance our ability to buy back prime scrap directly from our clients, cutting the middlemen and improving the margin contribution from scrap for both Cleveland-Cliffs and for the manufacturing and service center clients that will be able to sell scrap directly back to us," said Lourenco Goncalves, Cleveland-Cliffs' Chairman, President and CEO.

Read the original article on RTTNews ( https://www.rttnews.com/3231733/cleveland-cliffs-buys-fpt-forays-into-scrap-business.aspx)

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