Cross Keys Capital > Portfolio Items > Allied Metal Corporation

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Allied Metal Corporation

Closing Date: 11 / 21 / 2012

Acquired by Prime Materials Recovery  |  Industry: Materials  |  Sub-Industry: Scrap Metal


Deal Overview

Allied Metal Corporation (“Allied”), founded in 1963 and headquartered in Miami, Florida, is one of America’s foremost providers of non-ferrous scrap metal recycling from the Caribbean islands and South and Central America.  Allied has built an impeccable reputation based on 60 years of trust and quality service in sourcing scrap purchases and aggregating, sorting, and processing the materials in its state-of-the-art facility in Miami which has been expanded upon three times during the Company’s existence.

Allied, an $80 million company, was owned by the founding Mosheim family and was very unique in that it was entering its third generation of Mosheim ownership.  The grandfather, Peter, wanted to retire and take some “chips off the table”, while Leader Paul and his brother Bob wanted to maintain their status quo. The brothers were adamant that a partner had to be the right personality fit given they both planned on staying for the foreseeable future. Shaun, the grandson, was merely hoping that the glass ceiling at the Company could be lifted. He wanted to have the same invigorating career as his father and grandfather in the city and industry that he loved.

Prime Materials Recovery, a like-minded privately-held business based in Hartford, Connecticut also being groomed for third generation ownership, acquired substantially all of the assets of Allied.  Cross Keys Capital, LLC (“Cross Keys”) represented Allied via sell-side advisory services in conjunction with Akerman-Senterfit, Allied’s long-time and trusted legal counsel.  In addition to sourcing the buyer and negotiating the entire transaction, Cross Keys provided detailed valuation and structuring/financial assistance working hand-in-hand with Prime’s investment banking liaison, Carter, Morse & Mathias.  Cross Keys is very proud of this transaction given its many emotional turns and roller-coaster-like path to the closing. As a firm we worked through difficult issues such as falling commodity prices, retained equity in a privately-held business, emotions surrounding employment agreements, and working capital which tended to fluctuate greatly in a brokerage environment.

Cross Keys masterfully worked with the Carter, Morse & Mathias to skillfully and creatively craft a highly customized transaction which closed within 10 months of initially being engaged.  Interestingly enough, it took Allied over three years to hire Cross Keys (and be ready to embark upon a transaction) from the time that we initially were introduced.  The ultimate negotiated transaction was complex. The deal included a material cash payment at close, an extremely fair earn-out, and put options on Allied’s retained equity.  The creativity Cross Keys brought to the deal bridged the valuation gap between both parties and allowed for a successful closing.

  • 2012