Casella acquires Maine company
Casella Waste Systems has purchased BBI Waste Industries of Maine for up to $20 million in cash, plus 625,000 shares of Casella stock.
According to Casella, BBI, which provides waste services in New Hampshire and Maine, generated approximately $20 million in revenues over the last 12 months.
BBI operates out of seven locations which Casella said gives the company the opportunity to internalize additional waste and recyclables, and to consolidate operations, routes and transportation.
“The BBI team has built an exceptional solid waste company that is well regarded by its municipal, commercial and residential customers,” said John Casella, chairman and CEO of Casella Waste Systems. “The company and its employees are a great addition to our team and will play a key role in our effort to serve our customers and create value for our stakeholders.”
Casella said BBI’s operations complement the company’s existing operations in New Hampshire and Maine, creating the opportunity to expand in “several new market areas.”
After recognizing the cost synergies, Casella expects BBI to generate roughly $4.9 million of adjusted earnings (EBITDA) in the second 12 months of combined operations.
The transaction was structured as a stock purchase agreement for consideration of $20 million in cash and 625,000 shares of Casella common stock, with $18 million paid at closing and $2 million held in escrow.
Half of the escrow amount will be paid contingent upon the business achieving a pre-agreed upon minimum revenue stream for 90 days after the sale and for working capital adjustments during the same period.
The other half of the escrow amount will be held for 12 months to secure the seller’s indemnification obligations and certain expense adjustments to the purchase price.MORE IN This Just In
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