BioHiTech Global has entered into a letter of intent (LOI) with Entsorga USA to increase its stake in the nation's first resource recovery facility utilizing a proprietary high-efficiency biological treatment (HEBioT) technology for the disposal and recycling of mixed municipal solid waste (MSW).
The Martinsburg, W.Va., facility is expected to generate more than $7 million in revenue in 2019, when it begins its first year of full operations. Apple Valley Waste, a subsidiary of Gold Medal Group and co-owner of the Martinsburg facility, has contracted to provide the MSW feedstock for 10 years.
Approximately 40 percent or more of the waste processed at the facility will be converted into a clean-burning, U.S. Environmental Protection Agency-approved alternative fuel (solid recovered fuel or SRF) through the patented HEBioT process. The SRF is contracted to be sold for 10 years to a privately-held company in West Virginia that intends to use it as an approved supplement to fossil fuels in the production of cement.
The LOI contemplates BioHiTech acquiring up to an additional 30 percent stake in the Martinsburg facility from Entsorga USA in exchange for a number of shares of BioHiTech common stock. According to the company, if fully completed, the acquisition would make BioHiTech the largest equity owner of the Martinsburg facility at more than 47 percent and enable the company to consolidate the Martinsburg operations in its financial statements.
"We are excited about the opportunity to finally move forward with our plan to take a larger stake in the Martinsburg facility and potentially add over $7 million of high margin revenue to our income statement in 2019,” said Frank E. Celli, CEO of BioHiTech, in a statement. “While construction delays in 2017 pushed this plan back into 2018, we are now confident the Martinsburg facility will be fully operational in the coming months. We are also pleased to have our partners at Entsorga demonstrate continued faith in our company through a willingness to exchange their ownership for BioHiTech common stock. We intend to work diligently with Entsorga to finalize the definitive agreement and complete this important, value-generating transaction for our stockholders in the near future."
BioHiTech noted it acquired its original 17.2 percent stake in the Martinsburg facility last year for approximately $1 million in cash with an option to purchase an additional 22.4 percent stake for $1.4 million. The acquisition is subject to entering into a definitive agreement among the parties containing the final terms of the acquisition.
BioHiTech added it controls the U.S. development rights for the patented HEBioT solid waste processing technology developed by Entsorga Italia in 11 northeastern states and the District of Columbia. The company said it is currently in the permitting process for the construction of two additional HEBioT facilities in New York and is in preliminary discussions to site an additional facility in Philadelphia.