Houston-based Vertex, which recycles industrial waste streams and particularly motor oil, purchased the Columbus, Ohio-based Heartland, with its used oil collection and re-refining operations that include 21 trucks and five service locations covering Ohio, Kentucky, West Virginia and Pennsylvania. Also acquired was a used oil re-refinery in Columbus that processes about 16 million gallons annually of used oil into Group II Base oil, according to a news release.
The $16.5 million includes $8 million in contingent earn-out payments that Heartland may receive if the company meets certain earnings before interest, taxes, depreciation and amortization (EBITDA) targets in the second year following the closing of the purchase.
Also, Vertex’s chairman and CEO, Benjamin Cowart, bought $1.5 million of securities directly from the company, representing an aggregate of 488,598 shares of common stock and warrants to purchase 219,868 shares of common stock with a five-year term and a $3.01 exercise price for $3.07 per share.
“I believe that the Heartland acquisition helps position Vertex for greater growth in 2015 and beyond,” Cowart said. “We believe in a regional strategy which puts the right technology and the right market together.”
Heartland gives Vertex ability to expand and be more flexible in response to market challenges.
The acquisition also provides Vertex with the capability to process 135 million gallons annually.
Vertex and Heartland signed a letter of intent on the transaction in July and entered into a consulting agreement.