Schnitzer Steel Industries’ wholly owned subsidiary, RRC Acquisition LLC, has signed a definitive agreement to buy substantially all of the assets of Regional Recycling LLC for $65.5 million in cash and the assumption of certain liabilities.

Commenting on the agreement, John D. Carter, President and CEO of Schnitzer, said, "We are very pleased to add the Regional facilities and its employees to Schnitzer Steel. The Regional acquisition is our initial step in growing the East Coast businesses that we will receive upon closing of the separation agreement with Hugo Neu Corp. The Regional franchise is well situated to continue to participate in the growing market for recycled metals in the southeastern U.S., which is home to many new automobile and auto parts manufacturers. During calendar 2004, Regional sold over 500,000 tons of ferrous metal and nearly 100 million pounds of non-ferrous metal, which resulted in $190.4 million in revenue and a significant operating margin. Regional sells its ferrous metal to domestic steel mills in its area, of which there are 23 today. Its non-ferrous metal is sold in both domestic and foreign markets."

Mr. Carter added, "Regional is led by its two excellent managers, Byron Kopman and David Romanoff, who lead the growth of Regional today. Upon closing of the transaction, both Byron and David will sign employment agreements and join Schnitzer's executive management team being responsible for operating and growing Regional's franchise. We also anticipate hiring Regional's existing employees."

Closing of the transaction is subject to various conditions, including expiration of the Hart-Scott-Rodino Act waiting period and the approval of Schnitzer's Board of Directors. The transaction is anticipated to close within the next 60 days and will be funded from existing cash and borrowings under the Company's bank line of credit.

Schnitzer Steel Industries, Inc. is one of the nation's largest recyclers of ferrous metals, a leading self-service used auto parts retailer with 30 locations in the U.S. and Canada, and manufacturer of finished steel products. The company, with its joint venture partners, processes approximately 5.4 million of recycled ferrous metals per year and trades nearly 3.0 million tons. In addition, the company's steel mill — Cascade Steel Rolling Mills — has an annual production capacity of approximately 700,000 tons of finished steel products. Schnitzer and its joint venture partners operate primarily along the U.S. West Coast and the Northeastern seaboard of the U.S.