DATE: Friday, September 5, 1997             TAG: 9709050655

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 

                                            LENGTH:   60 lines

COLO. FIRM TO BUY JACOBSON METAL THE CHESAPEAKE RECYCLING FACILITY WILL CONTINUE OPERATING, THE BUYER SAYS.

A fast-growing Colorado-based metal recycling firm has agreed to buy Jacobson Metal Co. of Chesapeake, which runs the region's largest metal recycling facility.

Recycling Industries Inc. announced Thursday that it has signed a letter of intent to acquire Jacobson Metal. Terms of the deal were not disclosed.

Based in Englewood, Colo., Recycling Industries plans to continue operating Jacobson, which employs about 75 people, as a subsidiary.

``Everything should be pretty much business as usual,'' said George Ginsburg, Jacobson's president and one of its owners.

Ginsburg declined to say why he and co-owner Fred Jacobson want to sell the business, which generates about $30 million a year in revenue. Ginsburg will stay on with Recycling Industries, and continue to manage the Chesapeake facility.

For 42 years Jacobson Metal has operated its scrap recycling yard on the banks of the Elizabeth River's Southern Branch. The 67-acre facility is the last stop for many of Hampton Roads' junked cars and trucks, outdated machines and worn-out appliances.

A giant shredding machine there reduces the region's surplus to fist-sized chunks of steel. Jacobson sells the scrap overseas and domestically to mills that melt it down to make steel bars, beams and plates. Big customers include Roanoke Electric Steel, Nucor, and AmeriSteel, which operate minimills using electric furnaces to melt scrap steel instead of cooking coal and iron ore in furnaces to make steel.

Jacobson would be Recycling Industries's 11th acquisition since May 1994, said Nicholas Patanzis, an analyst with the New York brokerage Monness, Crespi & Hardt.

By buying up independent and frequently family-run steel recyclers around the country, Recycling Industries is trying to position itself as a dedicated supplier to the growing steel minimill industry, which uses scrap as its primary raw material, Patanzis said.

``The minimill industry is a growing business, and supplying the minimill industry is a growing business,'' Patanzis said. ``The difficulty is, in general the demand for scrap exceeds supply in a growing economy.''

That has made the scrap steel business very lucrative for many years, he said.

Thomas J. Wiens, Recycling Industries' chairman and CEO, said in a statement: ``This acquisition will strengthen our position in the southeastern market of the U.S. where the steel industry is undergoing a significant capacity expansion.''

With Jacobson, Recycling Industries says, it boosts sales to $120 million a year.

The company has been on an acquisition binge recently, buying scrap steel recyclers in Georgia and South Carolina this year. The firm operates a total of 10 steel scrap facilities, including others in Nevada, Texas, Iowa and Missouri.

More acquisitions are likely as Recycling Industries moves to become a significant supplier of scrap to the steel minimill industry, Patanzis said.

Recycling Industries' stock, which traded between $1 and $2 a share for most of the year, rose 46.875 cents a share to $2.75 a share in NASDAQ trading Thursday.

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