Tri-Coastal Acquisition Adds US$25M EBITDA, 20% ROIC to NAM’s Houston Operations

Strategic Acquisition Strengthens NAM’s Houston Footprint

North American Metal (NAM) has taken a significant step in consolidating its position in one of the US’s most industrialised scrap markets by acquiring Tri-Coastal for US$66.5 million. This move is designed to structurally improve NAM’s ability to service both domestic and international customers, particularly in the ferrous scrap segment, while driving higher and more resilient margins.

The acquisition includes an 18-year third-party operations contract with two five-year extension options, providing a stable long-term platform for operations. NAM expects the deal to contribute over US$25 million in EBITDA and deliver a robust 20% return on invested capital, highlighting the financial discipline behind the transaction.

Operational and Market Advantages

Tri-Coastal’s assets include more than 350,000 tonnes per annum of predominantly cut-grade ferrous scrap, expanding NAM’s market share in the Houston region. The acquisition also grants exclusive access to the Woodhouse terminal and city dock, enabling improved logistics and cost efficiencies. Notably, the deep-water port access removes the need for costly development at the Mayo Shell site, further reducing overheads and operational complexity.

Houston’s strategic importance is underscored by its status as the fourth largest US city with a GDP exceeding US$2.5 trillion, supported by energy, infrastructure, and heavy industry sectors. Export ferrous scrap prices have consistently traded at a premium to domestic prices, and the port access positions NAM to capture this export-linked pricing upside while maintaining domestic market exposure. This dual exposure offers downside protection during domestic cycles and upside leverage to global scrap demand.

Capital Efficiency and Property Strategy

Beyond operational synergies, NAM plans to unlock more than US$100 million in land sales within the next one to two years by divesting surplus properties identified through the acquisition. This includes the planned sale of the Mayo Shell site, which will substantially fund the Tri-Coastal purchase. The company is also rationalising its footprint by targeting the sale of three additional sites, streamlining its asset base to focus on core, long-term operational hubs.

Capital avoidance and redeployment are key themes, with NAM aiming to reuse, resell, or eliminate redundant equipment and avoid costly site developments. This approach enhances capital efficiency and supports margin expansion, positioning Houston as a lower-cost, higher-margin strategic hub within NAM’s North American operations.

Looking Ahead

Investors and market watchers will be keenly awaiting NAM’s HY26 financial results and upcoming investor presentations, including a US Investor Day in Houston and site tours, which will provide further clarity on integration progress and realised benefits. The acquisition marks a pivotal moment for NAM as it deepens its presence in a structurally attractive market with strong export pricing optionality and operational scale.