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Non-Tech : RECY Looking Good... A -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (3690)	1/5/1998 10:41:00 AM
From: Tim Oliver	Read Replies (1) \| Respond to of 7006

RECY is worth at least $9 a share in a buyout right now... Phillip's Services, a major metals recycler based in Canada announced just over two months ago a group of acquisitions in the southeast part of the United States (the area where RECY is also focusing). They paid $495 million for $775 million revenues which included some brokerage business (lower margin). In other words, they paid roughly 65% of revenues for the acquisitions (the percentage is probably a little higher since they picked up $32 million debt too). If PHV paid 65% of RECY's revenue run rate of $285 million, they'd pay $185 million. If you assume 20 million shares of fully diluted RECY stock after the last acquisitions, that works out to over $9 per share for RECY shareholders. Here's the press release: =========================================== Philip Services Closes Ferrous Acquisitions October 29, 1997: Philip Services Corp. ("Philip")(NYSE; TSE; MSE: PHV) today announced that it has closed the acquisition of the Steiner-Liff Metals group of companies ("Steiner-Liff"), headquartered in Nashville, Tennessee and the Southern Foundry Supply group of companies ("Southern Foundry"), headquartered in Chattanooga, Tennessee. These companies provide scrap processing and mill and industrial services to the steel industry. These acquisitions, combined with the recent acquisition of Luria Brothers ("Luria"), establish Philip as the leading ferrous processor in North America. Collectively, they add US $775 million in revenue (including brokerage), twenty-two locations, eleven shredders and 1200 employees to Philip's ferrous processing operations. The aggregate purchase price for Luria, Steiner-Liff and Southern Foundry was US $495.9 million which includes the assumption of US $32.6 million in debt. Part of the purchase price was satisfied by the issuance of 5.6 million Philip common shares. ================================================ The investors that just picked up 1.67 million shares of RECY stock at $6, probably are smart enough to see the acquisition value of RECY at $9+ in a rapidly consolidating industry. Some other investors focus on short term earnings numbers and don't see the big picture. By the way, RECY paid 75% of the revenue run rate of the six recent acquisitions which is higher than the 65% that PHV paid for their recent acquisitions. Perhaps RECY's acquisitions are more profitable and RECY might get $10 or more from PHV in a buyout.