Signature Group Holdings Inc. announced on Friday that it will acquire Global Recycling and Specification Alloys for $525 million.

Signature, in Sherman Oaks, is acquiring the business unit from Aleris International Inc. of Beachwood, Ohio. The sale includes 18 metal and alloy recycling service facilities in North America and six in Europe.

Signature will pay $495 million in cash, with the remainder in preferred shares in Signature. The company expects to finance the acquisition with a combination of cash and the proceeds from debt and equity financings. Signature, which is an investment holding company that buys profitable target businesses, plans on issuing about $300 million of senior secured bonds in a private placement, as well as a registered offering of Signature's common stock at a later date.

“This transaction fulfills a promise made to our stockholders to seek large, accretive, well-valued acquisitions,” said Craig Bouchard, Signature’s chairman and chief executive, in a statement. “It is an important step as we continue to build Signature into a significant and profitable company.”

Global Recycling is one of the largest independent aluminum recycling companies in the world. It serves the the automotive, aerospace, packaging, building and construction industries.

Signature expects to name Terry Hogan, currently senior vice president and leader of Aleris' Recycling and Specification Alloys business in North America, as president of the unit. Russell Barr, vice president and leader of Aleris' recycling business in Europe is expected to serve as executive vice president, Europe.

The deal is expected to close in the next few months after regulatory approvals and closing conditions are met. Credit Suisse and KeyBanc Capital Markets Inc. acted as financial advisors to Aleris. Fried, Frank, Harris, Shriver and Jacobson, LLP acted as legal advisors.