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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) January 8, 1998
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METAL MANAGEMENT, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-14836 94-2835068
(Commission File Number) (I.R.S. Employer Identification No.)
500 N. Dearborn Street, Suite 405, Chicago, IL 60610
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(Address of Principal Executive Offices) (Zip Code)
(312) 645-0700
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On January 8, 1998, pursuant to an Agreement and Plan of Merger, dated
December 11, 1997 (the "Merger Agreement"), among Metal Management, Inc. (the
"Company"), HCS Acquisition, Inc., Houston Compressed Steel Corp. ("Houston
Compressed") and the shareholders of Houston Compressed, the Company completed
its acquisition of Houston Compressed, as described in the press release which
is filed as an exhibit hereto and incorporated herein by reference. Pursuant
to the Merger Agreement, HCS Acquisition, Inc., a wholly owned subsidiary of
the Company, was merged with and into Houston Compressed in exchange for (i)
the issuance to the shareholders of Houston Compressed of 253,176 shares of the
Company's common stock and (ii) the issuance to the President and Vice
President and General Manager of Houston Compressed of options to purchase an
aggregate of 45,000 additional shares of the Company's common stock, at an
exercise price of $16.50 per share. In addition, at the Closing the President
and Vice President and General Manager of Houston Compressed entered into
multi-year employment agreements with Houston Compressed.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.1 Agreement and Plan of Merger, dated December 11, 1997, by and
among Metal Management, Inc., HCS Acquisition, Inc., Houston
Compressed Steel Corp. and the Shareholders of Houston Compressed
Steel Corp. (incorporated by reference to Exhibit 4.11 to the
Company's Registration Statement on Form S-3 (Registration No.
333-43423)).
99.1 Press Release dated January 9, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METAL MANAGEMENT, INC.
Dated: January 22, 1998 By: /s/ Gerard M. Jacobs
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Gerard M. Jacobs
Chief Executive Officer
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Exhibit 99.1
For Immediate Release
For More Information Contact:
Xavier Hermosillo, Corporate Communications and Investor Relations:
Midwest/East -- Call (312) 645-0445 -- West Coast -- Call (310) 832-2999
METAL MANAGEMENT
ANNOUNCES
COMPLETION OF ACQUISITION OF HOUSTON COMPRESSED STEEL
Chicago, IL -- January 9, 1998 -- Metal Management, Inc. (NASDAQ symbol-MTLM)
("Metal Management") today announced that it has completed its acquisition of
Houston Compressed Steel Corp. ("Houston Compressed"), making it the third
Houston-area acquisition for MTLM.
The transaction has been structured as a tax-free merger. The shareholders of
Houston Compressed received 253,176 shares of Metal Management common stock.
In addition, Jack Segal, who currently serves as President of Houston
Compressed, and his son, Howard, currently the Vice President and General
Manager, have received warrants to purchase an aggregate of 45,000 shares of
Metal Management common stock.
The Segals have entered into multi-year employment agreements with Houston
Compressed Steel, which is now a wholly-owned subsidiary of Metal Management.
It will operate as part of the Gulf States region which is under the direction
of the Proler Southwest operations in Houston.
Houston Compressed, which has estimated annualized gross revenues of
$15-million, is a 56-year-old, third generation, family-owned operation.
Houston Compressed is involved in the dismantling of steel mills and chemical
plants, the scrapping of barges and other vessels, and has a strong non-ferrous
processing operation. It was founded in 1941 by Jack Segal's father-in-law,
Sidney Byer, recognized as an early pioneer and innovator in the metal
recycling industry.
"We're very happy to be part of this team," said Jack Segal. "It's something
we've looked forward to for a long time. We feel Metal Management and the
Proler Southwest folks are people that can really get things moving. We're
excited about where this region is headed."
"We have worked with the Prolers in the past and we know each other well," said
Howard Segal. "We will now be able to do things we've never seen before in the
scrap industry. We bring the ability to serve customers in a way that provides
better service delivery options."
Bill Proler, President of Proler Southwest, said "Jack and Howard Segal bring
decades of experience to our Metal Management team. Their expertise in running
Houston Compressed Steel will now carry over into their new duties with our
Gulf States region and I'm thrilled to have them on our team."
Daniel B. Burgess, Executive Vice President of Metal Management, said "The
acquisition of Houston Compressed Steel solidifies and enhances our strong
position in the Houston area and the Gulf States region. This now makes us the
metal recycling leader in the Houston marketplace."
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Metal Management, Inc., headquartered in Chicago, is a fast-growing
consolidator of the scrap metal recycling industry. The MTLM family of
companies includes Cozzi Iron & Metal, Inc. of Chicago, one of the largest
scrap metal operations in the U.S., Proler Southwest, Inc. of Houston, Texas, a
leading recycler of industrial ferrous scrap on the Houston Ship Channel, the
Isaac Group of Companies of Toledo, one of the world's largest briquetting
operations, Reserve Iron & Metal L.P. of Cleveland and Chicago, a major ferrous
metal-breaking operation, the MacLeod Group of Companies in Los Angeles, a
major wire chopper and processor, HouTex Metals Company, a significant supplier
of ferrous metals to minimills, which is located on the Houston Ship Channel,
EMCO Recycling of Phoenix, one of the largest scrap metal recyclers in Arizona,
and Kankakee Scrap Corp., a Chicago area scrap recycler.
Metal Management also has several acquisitions pending. The Company has signed
binding letters of intent or letters of intent to acquire Superior Forge, Inc.
of Huntington Beach, California, Salt River Recycling, L.L.C. of Phoenix,
Arizona, Goldin Industries of Gulfport, Mississippi, PerlCo, L.L.C. of Memphis,
Tennessee, Aerospace Metals, Inc. of Hartford, Connecticut, the Yonack and Gold
Metal Group of Companies in Dallas, with scrap metal operations throughout
Texas and in Arkansas, and Chicago-area scrap metal recyclers Accurate Iron &
Metal Co., 138 Scrap Inc., and Katrick Inc.
All of the statements in this release, other than historical facts, are
forward-looking statements made in reliance upon the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. As such, they involve
risks and uncertainties and are subject to change at any time. These
statements reflect the Company's current expectations regarding the future
profitability of the Company and its subsidiaries and the benefits to be
derived from the Company's execution of the Company's industry consolidation
strategy. As discussed in the Company's annual report for the period ended
March 31, 1997, its quarterly reports for the periods ended June 30, 1997 and
September 30, 1997, and its proxy statement dated November 20, 1997, some of
the factors which could affect the Company's performance include, among other
things: possible inability to replace short term financing with longer term
capital commitments, possible inability to obtain capital through debt and/or
equity placements sufficient to fund cash requirements under acquisition and
merger agreements, risk of expansion strategy, cyclicality of operating
results, price fluctuations, existing and future debt of the Company,
competition in the scrap metal industry, immediate and future capital
requirements, substantial leverage, reliance on management and principal
stockholders, and environmental matters.
