Metalico Inc. (MEA)

[polkamatic]

Metalico Secures Private Placement for Anticipated Acquisitions
Friday June 22, 8:45 am ET


CRANFORD, N.J.--(BUSINESS WIRE)--Metalico, Inc. (AMEX: MEA - News), a rapidly growing scrap metal recycler and lead fabricator, today announced it has entered into a definitive purchase agreement with institutional investors to raise $36,722,000 million of gross proceeds in a private placement of its common stock. In connection with the private placement, Metalico will issue an aggregate of 5,246,000 shares of common stock at a price per share of $7.
The Company intends to use the net proceeds from the offering to fund acquisitions of two scrap metal recycling companies currently under letter of intent and in advanced stages of contract negotiation, and for general corporate purposes. The acquisition targets collectively generated approximately $92 million in revenues in their most recently completed fiscal years.

The aggregate purchase price for the contemplated acquisitions is approximately $63 million plus additional items of consideration to be finalized, including in one case an earnout based on the performance of the purchased assets. The Company plans to finance the remaining portion of the purchase prices with debt to be issued by Metalico's current senior secured lender and under a new term loan facility to be provided by a prominent commercial and industrial lending institution.

No other terms of the pending acquisitions were disclosed.

The Company plans to close the private placement promptly, subject to customary closing conditions. The closing and funding of the private placement is not subject to the consummation of any contemplated acquisition or any other financing.

"This financing will be used to fuel our continued growth, particularly as we expand our geographic footprint and the types of commodity metals we recycle," said Carlos E. Aguero, Metalico's President and Chief Executive Officer.

The shares of common stock have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or an applicable exemption from those registration requirements. Metalico has agreed to file a registration statement with the United States Securities and Exchange Commission covering the shares sold in the offering no later than thirty days after the closing, and to use commercially reasonable efforts to have the registration statement declared effective as soon as practicable thereafter. Following this transaction, Metalico will have approximately 31.5 million shares of common stock outstanding.

Canaccord Adams, Inc., acted as placement agent in connection with the offering.

This press release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

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