BioHiTech Global, a technology and services company that provides waste management solutions, announced it has entered into a definitive agreement to acquire an additional 26.8 percent ownership stake in the nation's first HEBioT (high efficiency mechanical and biological treatment) renewable resource recovery facility located in Martinsburg, W.Va.
According to the company, the acquisition will make BioHiTech the largest owner of the Martinsburg facility and enable the company to consolidate an estimated $7 million in annual high margin revenue generated by the operations in its financial statements beginning in 2019.
The company is acquiring the additional ownership stake in the Martinsburg facility from Entsorga USA in exchange for the issuance of approximately $1.886 million in BioHiTech preferred stock, convertible into BioHiTech common stock at a fixed price of $2.64 per share. Entsorga USA, a company owned by the principals of the Italian engineering firm that developed the HEBioT technology, will remain as a minority owner of the facility.
The Martinsburg facility is expected to begin the commissioning process in December and to ramp production throughout the first quarter of 2019. The facility will utilize a HEBioT process for the disposal and recycling of mixed municipal solid waste (MSW) into an Environmental Protection Agency-approved solid recovered fuel (SRF).
The HEBioT process is expected to divert from landfills as much as 80 percent of the waste that enters the facility. The Martinsburg facility has secured 10-year agreements for both the supply of MSW from a regional hauler and the off-take of the SRF production by a multibillion dollar cement company with operations nearby.
The Martinsburg facility is the first of a series of facilities utilizing the patented HEBioT process that BioHiTech plans to build in the U.S. in the coming years. The company noted it controls the exclusive development rights to the HEBioT technology in 12 Northeastern states and the District of Columbia. A second site is currently under development in Rensselaer, N.Y., with other potential locations in early stage planning.
"Becoming the largest owner of the Martinsburg facility is a transformative event for our company, and we are excited to begin the full U.S. commercialization of this important environmentally friendly disposal technology,” said Frank E. Celli, CEO of BioHiTech Global, in a statement. “Not only will these operations add significant high margin revenue to BioHiTech's financials in 2019, but it will also serve as a showplace for our future roll-out in the U.S. With plans to add additional facilities, including Rensselaer and potentially Philadelphia in the coming years, we now have a solid roadmap for progressive revenue and EBITDA growth from our HEBioT business. We are more confident than ever that this will enable us to change the waste management industry and build significant value for our stockholders."