Sims Limited (ASX:SGM)
Source: Sims Limited
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  • Sims Limited (SGM) has agreed to sell a 50.46 per cent stake in its U.S. business Sims Municipal Recycling (SMR) for US$45.4 million (A$63 million)
  • The majority stake will be sold to a group of investors, including investment funds managed by Closed Loop Partners, a circular economy-focused investment firm and innovation centre
  • The company says it will use proceeds from the sale to fund its recent acquisitions of Recyclers Australia and Atlantic Recycling Group which were priced at around $69 million
  • Sims will hold two of the five SMR board seats and the transaction is expected to close in Q3 FY22
  • Sims Limited share are down 0.92 per cent to trade at $16.09 at 1:18 pm AEDT

Sims Limited (SGM) has agreed to sell a 50.46 per cent stake in its U.S. business Sims Municipal Recycling (SMR) for US$45.4 million (A$63 million).

The majority stake will be sold to a group of investors, including investment funds managed by Closed Loop Partners, a circular economy-focused investment firm and innovation centre.

Sims will hold two of the five SMR board seats and the transaction is expected to close in Q3 FY22.

The company says it will use proceeds from the sale to fund its recent acquisitions of Recyclers Australia and Atlantic Recycling Group which were priced at around $69 million.

Established in 2003, SMR is the cornerstone of the New York curbside recycling program, processing and marketing 100 per cent of the metal, glass and plastic, and 50 per cent of the paper collected by the New York Department of Sanitation.

SMR operates four recycling facilities, three in the New York-New Jersey metro region and one in Florida. In FY21 the company processed 660,000 tonnes of municipal curbside material.

Closed Loop Partners is a New York based investment firm which manages venture capital, growth and private equity, and project-based finance funds, as well as an innovation centre focused on building the circular economy.

The investors in Closed Loop Partners funds include pension funds, foundations, consumer goods companies and family offices focused on ESG investing and the circular economy.

Its investments align capitalism with positive social and environmental impact by reducing waste and greenhouse gas emissions via materials innovation, advanced recycling technologies, supply chain optimisation and landfill diversion.

Sims Limited CEO and managing director, Alistair Field, says the transaction maximises the company’s opportunities within the circular economy.

“I am delighted that we have been able to secure a high–quality, like-minded joint venture partner who will work alongside us to create a world without waste to preserve our planet,” he said.

“Closed Loop Partners has the strategic management focus and expertise to help more rapidly take SMR to the next level in expanding recycling beyond New York City.”

Together, we look to expand the materials accepted by SMR, optimise recycling accessibility across New York City, and significantly grow SMR’s service areas across the United States.”

Sims Limited share are down 0.92 per cent to trade at $16.09 at 1:18 pm AEDT.

SGM by the numbers
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