- Sims acquires TCT to consolidate Houston
- Access gained to long-term deep-sea dock
Australian recycling company, Sims Limited, has agreed to acquire the assets of Tri Coastal Trading (TCT) for $66.5 million, marking a key step in consolidating its Houston operations and lowering operating costs. The acquisition will be largely funded through the planned sale of Sims’ nearby Mayo Shell property, with total divestment proceeds from Houston land assets expected to exceed $100 million.
Tri Coastal Trading reports annual revenues exceeding $350 million and total handled volumes of more than 800,000 t per year, and exports approximately 350,000 t of processed obsolete scrap annually. The company also operates a deep-sea dock facility in Galena Park under a long-term service agreement with Enstructure LLC, serving key export markets such as Mexico and Turkiye.
Under the proposed integration, Sims plans to relocate its Houston ferrous operations to the TCT site. This move is expected to generate meaningful operating and administrative cost efficiencies while significantly enhancing logistics flexibility across truck, rail, barge, and bulk vessel channels.
The Enstructure service agreement has 18 years remaining, with two five-year extension options, offering long-term operational security. Post-integration, Sims expects the combined Houston EBITDA to exceed $25 million, assuming current scrap prices. The deal reflects an EBITDA multiple of below four times and a post-synergy ROIC of over 20%.
The company’s management said the transaction removes the need for heavy capital investment, unlocks land value, and significantly improves profitability in one of the US’s largest scrap markets.
Leave a Reply