Eldridge Provides $120M Credit Facility to Scrap Management Industries

Eldridge Industries, the Greenwich, Connecticut-based multi-strategy holding company, has closed a $120 million senior term loan facility with Scrap Management Industries, a North Carolina-based scrap metal processing and recycling company. The transaction, announced March 3, 2026, represents a strategic bet on the industrial infrastructure sector amid robust demand for recycled materials and ongoing reshoring trends across American manufacturing.

The financing will support working capital requirements and operational expansion initiatives at Scrap Management Industries, which has established itself as a significant regional player in the ferrous and non-ferrous scrap metal markets. While specific use of proceeds was not disclosed, industry observers note that such facilities typically fund equipment acquisitions, facility upgrades, and geographic expansion in the capital-intensive recycling sector.

The deal underscores Eldridge's continued expansion into industrial and infrastructure-related lending, a strategic focus that has gained momentum as traditional bank lenders retreat from mid-market industrial credits. Founded by Todd Boehly—who also serves as co-controlling owner of the Chelsea Football Club and co-founder of Cain International—Eldridge has built a diversified portfolio spanning insurance, asset management, technology, real estate, and media alongside its credit platform.

"We are pleased to partner with Scrap Management Industries and support their continued growth," said a spokesperson for Eldridge in the announcement. "This investment reflects our commitment to providing flexible capital solutions to well-managed businesses in essential industries."

The firm's approach combines the patient capital orientation of a family office with the operational discipline of an institutional investor, allowing it to structure customized financing solutions that often fall outside the parameters of traditional lenders or private equity sponsors. Eldridge manages approximately $10 billion in assets across its various platforms, with credit investments forming an increasingly important component of the portfolio.

Scrap Management Industries operates in a sector experiencing significant structural tailwinds. The global scrap metal recycling market, valued at approximately $74 billion in 2025 according to industry research, is projected to grow at a compound annual rate of 5-6% through 2030, driven by sustainability mandates, resource scarcity concerns, and economic incentives favoring recycled inputs over virgin materials.

North Carolina's strategic location within the Southeast industrial corridor positions Scrap Management Industries to serve both established manufacturing clusters and emerging production facilities. The state has attracted more than $35 billion in manufacturing investments since 2021, including major electric vehicle and battery production plants that will generate substantial scrap streams requiring sophisticated processing capabilities.

The scrap metal industry remains highly fragmented, with the top 10 operators controlling less than 30% of the domestic market. This fragmentation creates opportunities for well-capitalized regional players to gain market share through organic growth and strategic acquisitions of smaller yards.

However, the industry faces notable operating challenges. Volatile commodity prices create earnings volatility—ferrous scrap prices have fluctuated between $250 and $550 per ton over the past 24 months—while regulatory compliance costs continue to escalate. Environmental regulations governing stormwater management, air quality, and waste handling require ongoing capital investment, favoring operators with access to growth capital.

While Eldridge did not disclose specific terms of the $120 million facility, senior term loans in the scrap processing sector typically carry interest rates in the SOFR+450 to SOFR+650 basis point range for established operators, with five- to seven-year maturities. Covenant packages generally include minimum EBITDA requirements, debt service coverage ratios, and restrictions on additional indebtedness or asset sales.

The transaction was advised by Houlihan Lokey, which served as financial advisor to Scrap Management Industries, and Womble Bond Dickinson, which provided legal counsel. Eldridge was represented by Kirkland & Ellis.

The deal comes as direct lending to industrial companies has surged, with private credit funds deploying record volumes into sectors previously dominated by traditional banks. According to Preqin data, industrial and manufacturing lending represented approximately 18% of private credit originations in 2025, up from 12% in 2022, as asset managers seek yield in operationally complex businesses that offer structural protections through hard asset collateral.

The Eldridge transaction follows several notable financing and M&A events in the scrap processing sector over the past 18 months:

These transactions highlight continued institutional interest in the recycling infrastructure value chain, particularly among investors with operational expertise in commodity-exposed, asset-heavy industries. The sector's essential role in circular economy initiatives and domestic supply chain resilience has attracted both strategic acquirers and financial sponsors seeking inflation-protected cash flows.

For Scrap Management Industries, the Eldridge facility provides non-dilutive capital to pursue growth initiatives while maintaining ownership independence—a critical consideration for family-owned or founder-led businesses in the sector. Unlike equity investments that would require governance concessions, senior debt allows management teams to retain strategic control while accessing institutional capital markets.

The financing also positions the company to capitalize on potential acquisition opportunities as smaller operators face succession challenges or capital constraints. Industry analysts estimate that approximately 40% of scrap yards are owned by operators over age 60, creating a generational transition dynamic that should drive consolidation activity over the next five to seven years.

The transaction unfolds against a complex macroeconomic backdrop. While manufacturing activity has shown resilience—the ISM Manufacturing Index registered 51.2 in February 2026, indicating modest expansion—construction activity has softened in response to elevated interest rates, creating mixed demand signals for scrap processors whose revenues are highly correlated to end-market consumption.

However, multi-year infrastructure spending authorized under the Infrastructure Investment and Jobs Act and CHIPS Act continues to support underlying demand for recycled steel and other materials. The Congressional Budget Office projects federal infrastructure-related spending will average $125 billion annually through 2028, providing a demand floor for industrial materials even as private construction moderates.

The Eldridge-Scrap Management Industries transaction exemplifies evolving capital markets dynamics in middle-market industrial lending. As traditional commercial banks continue to reduce exposure to asset-based lending and commodity-linked credits—driven by regulatory capital requirements and risk management considerations—alternative capital providers have stepped in to fill the void.

For Eldridge, the investment aligns with a broader portfolio strategy of backing operationally intensive businesses with strong management teams and defendable market positions. The firm's ability to provide flexible capital structures and long-term partnership orientation differentiates its approach from both traditional lenders and private equity sponsors operating under time-bound fund structures.

Market participants expect continued activity in the scrap processing sector throughout 2026, driven by consolidation dynamics, succession planning needs, and capital requirements for environmental compliance and operational efficiency investments. The combination of structural growth drivers and fragmented market structure creates an attractive environment for both strategic and financial investors with patient capital and operational expertise.

As manufacturing reshoring initiatives gain momentum and sustainability mandates expand, scrap processors occupy an increasingly strategic position in domestic industrial supply chains. The Eldridge facility provides Scrap Management Industries with the financial flexibility to capitalize on these long-term trends while navigating near-term market volatility—a balance that will likely define success in the sector for years to come.