Business Acquisitions and Capital Expenditures

6 Months Ended

Jun. 30, 2011

Business Acquisitions and Capital Expenditures [Abstract]

Business Acquisitions and Capital Expenditures

Note 2 — Business Acquisitions and Capital Expenditures

     Business acquisition (scrap metal recycling segment): On January 31, 2011, the Company acquired 100% of the outstanding capital stock of Goodman Services, Inc., a Bradford, Pennsylvania-based full service recycling company with additional operations in Jamestown, New York and Canton, Ohio. The acquisition is consistent with the Company’s expansion strategy of penetrating geographically contiguous markets and benefiting from intercompany and operating synergies that are available through consolidation. The purchase price included cash and Metalico common stock among other items of consideration. The financial statements include a preliminary purchase price allocation. Funding for the acquisition included a drawdown under the Company’s Credit Agreement. As part of the purchase price for the acquisition, the Company issued 782,763 shares of its common stock, par value $0.001 per share having an aggregate value to the sellers of $4,391 determined at a price per share of $5.61. Unaudited pro forma results are not presented as they are not material to the Company’s overall consolidated financial statements.

     Capital Expenditures: On February 18, 2011, the Company purchased a 44-acre parcel of land, including a 177,500-square-foot building, in suburban Buffalo to house an indoor scrap metal shredder. The installation will include a new state-of-the-art downstream separation system to maximize the recovery of valuable non-ferrous products. The Company expects to make a capital investment of more than $10 million for the acquisition of the property, plant and support equipment and related improvements for the shredder project. The Company will use proceeds from the Credit Agreement and available cash to fund the expenditures. The facility is expected to be operational by the end of 2011.