Australia-based Sims Ltd. has agreed to sell a majority stake in Sims Municipal Recycling of New York LLC (SMR) to a group of investors, including investment funds managed by New York-based Closed Loop Partners. Under terms of the transaction, Sims will sell 50.46 percent of Sims Municipal Recycling for $45.4 million and will hold two of the five Sims Municipal Recycling board seats.
According to a news release from Sims Ltd., this transaction is expected to close in the third quarter of 2022.
Sims Municipal Recycling was formed in 2003 and offers curbside recycling, processing and marketing services in New York City. It operates four recycling facilities, three of which are in the New York-New Jersey metro area and one in Florida. This past year, Sims Municipal Recycling processed 660,000 metric tons of municipal curbside materials.
Closed Loop Partners manages venture capital, growth equity, private equity and project-based finance funds all focused on building the circular economy. Investors in Closed Loop Partners include pension funds, foundations, consumer goods companies and family offices focused on environmental, social and governance investing and the circular economy.
According to a statement from Closed Loop Partners to Recycling Today, Closed Loop Partners expects the acquisition to accelerate its focus on its investments in modernizing recycling facilities across the U.S. and closing the loop on materials.
“This transaction demonstrates Sims’ leadership and commitment to innovate quickly—and at scale—and to maximize opportunities within the circular economy,” says Alistair Field, CEO and managing director of Sims Ltd. “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. Closed Loop Partners has the strategic management focus and expertise to help more rapidly take [Sims Municipal Recycling] to the next level in expanding recycling beyond New York City. Together, we look to expand materials accepted by SMR, optimize recycling accessibility across New York City and significantly grow SMR’s service areas across the United States.”
Réal Hamilton-Romeo, global head of communications and marketing at Sims, says the company plans to remain a major owner in SMR. She says SMR's management and operations teams will remain the same after the transaction is finalized. Additionally, she says Sims Municipal Recycling will retain its name because of its strong brand recognition.
"Sims Ltd. and Closed Loop Partners share a common goal for a waste-free world," Hamilton-Romeo says. "As a joint owner of Sims Municipal Recycling, Closed Loop Partners will leverage its extensive network to further develop the curbside recycling business as well as expand Sims Municipal Recycling into additional municipalities and additional postconsumer recyclable streams. Sims Ltd. remains a major owner and will continue to be actively involved in Sims Municipal Recycling's growth as well as sit on the business' board."
Field adds that the company plans to use the sale price to help fund other transactions the company has made recently, such as its acquisition of Recyclers Australia and Atlantic Recycling Group, which has two locations in Baltimore operating under the United Iron & Metal name, including a shredder yard, as well as a location under the Montgomery Scrap name in Rockville, Maryland.