Harsco acquires aluminium recycling specialist AltekVolker Karow
Harsco Corporation has acquired Altek Group, a UK-based specialist in the design and manufacturer of aluminium dross and scrap processing systems. Harsco acquired Altek on a debt and cash free basis, for a purchase price of £45 million (USD$60m), plus an additional future contingent consideration subject to the future financial performance of Altek.
Nick Grasberger, Harsco president and CEO, commented the acquisition as follows: “Altek fits perfectly with our strategy of developing a premier environmental solutions platform, by acquiring technologies that expand our capabilities in managing industrial waste. We are optimistic about Altek’s growth potential within our Metals & Minerals business. Altek is M&M’s first acquisition in more than a decade, representing another step to accelerate our growth.”
The cost-efficient recovery of metal and other valuable materials – and environmentally-safe solutions for residual waste materials – are increasingly important to the aluminium industry. Altek’s latest innovation, AluSalt, offers customers a technology that converts salt slag waste into valuable products, addressing one of the largest environmental concerns within the aluminium market.
Key attributes of the acquisition include:
Market leadership. Altek has built market leading brands, with a No. 1 global position in aluminium dross pressing and electromagnetic stirring equipment. Its core (legacy) products are currently present in nearly 60 countries with over 400 installations.
Innovative technologies. AluSalt is an on-site salt slag processing technology that offers meaningful cost advantages and greater operational flexibility over current market technologies.
Strengthens Harsco’s environmental brand. AluSalt and other Altek products complement the environmental brand of Harsco’s Metals & Minerals business and fit the core strategy of creating value from waste, with another zero-waste solution.
Significant market opportunity. Salt slag processing today represents a nearly USD2 billion potential market and is likely to realize future growth rates above the underlying aluminium market. Altek’s initial AluSalt plant is now operational in Europe, and the company’s revenues are expected to approach USD100 million within five years, representing a roughly 40% CAGR and only a modest portion of the total market opportunity.
Leverage global footprint and relationships. Altek will benefit from Harsco’s Metals & Minerals global platform, extensive customer relationships and core process disciplines. Also, certain Altek primary products and by-products have applicable, value-enhancing applications within the steel industry.
Fits financial framework for acquisitions. Altek is a profitable, capital-light business with attractive margins and is anticipated to generate robust investment returns. It is expected to be accretive to Harsco’s earnings per share and free cash flow in 2019, after considering acquisition accounting adjustments. Also, Harsco’s capital structure and financial flexibility remain strong following this transaction.
“This acquisition is a very positive step forward for Altek, providing the company with a strong financial owner and industry leader which is committed to supporting Altek’s growth and innovation strategy,”said Alan Peel, managing director of Altek. “With Harsco’s extensive international presence and company infrastructure, Harsco will greatly enhance the ability of Altek to provide service and support to its international customer base. This will be particularly helpful as we commercialize our latest technology AluSalt around the world. With very similar and aligned values between the two companies, all of this will provide for a very exciting future for Altek with Harsco and the customers we serve within the aluminium industry,”