The industrial waste management company Befesa purchased the remaining 50 per cent of Recytech, the French steel mill dust recycler company it had previously owned together with its now-insolvent joint venture partner Recylex. The transaction was valued at €40m, Befesa announced at the end of last week.
CEO Javier Molina described the acquisition as an important milestone in the European component of the recycler's growth plan. "Europe remains our core business, and the acquisition of the remaining 50 per cent in Recytech represents the opportunity to strengthen our leadership position in this crucial market, positioning us for further growth," Mr Molina added.
Founded in 1991 by Befesa and Recylex, Recytech is headquartered in in Fouquières-lès-Lens in northern France and processes dust from electric arc furnace (EAF) steel mills, extracting zinc and converting it into waelz oxide (WOX). With 50 employees, Recytech recycles around 110,000 tonnes of EAF steel dust per year and produces 45,000 tonnes of WOX.
Befesa's acquisition of the outstanding shares in the joint venture is intended to provide long-term stability for Recytech's employees, suppliers and customers. The company stressed that the financial troubles that let to Recylex's liquidation resulted from challenges in the lead-acid battery recycling business and were unrelated to its interest in Recytech. The €40m cash consideration paid for the remaining stake in the business represented an earnings before interest, tax, depreciation and amortisation (Ebitda) multiple of 3.5 on the basis of an entire business cycle, said Befesa.
"Unifying the Recytech business in Befesa’s operations in France reinforces our commitment to the market and is a firm demonstration of our confidence in the current local leadership team. The strategic location of Recytech will enable us to expand our EAF steel dust recycling services further in the heart of an area where EAF steel production will grow over the coming years," explained Mr Molina.
According to Befesa, Recytech's central location in the European steel industry growth area had high strategic value and offered Befesa the opportunity to expand its European operations by constructing a second kiln through a brownfield project in Fouquières-lès-Lens. The acquisition was therefore also an essential part of Befesa's five-year plan for sustainable global growth, which was announced in November 2022 and which includes nine growth projects in Europe, the US and China. The investment in Recytech is the first phase of increasing Befesa's EAF dust recycling capacity in Europe, according to the company. Within Europe, the group has sites in Spain, France, Germany and Sweden.
