Rutland, Vt.-based Casella Waste Systems has reached an agreement to sell some recycling assets to a new company formed by Pegasus Capital Advisors LP and Intersection LLC for $130.4 million.
The assets include 17 material recovery facilities, a transfer station and “certain related intellectual property assets,” according to a press release issued by Casella Waste. The release doesn’t identify the exact location of the properties but does say the assets are located outside of Casella’s “core operating region of New York, Massachusetts, Vermont, New Hampshire, Maine and northern Pennsylvania.”
The transaction, which is expected to close by March 2011, will provide Casella with $117.4 million in net cash proceeds, the company says. Casella plans to use the proceeds to pay down its debt.
“With this important transaction, we will have made substantial progress toward our objective to deliver the balance sheet,” said John W. Casella, chairman and CEO of Casella Waste, in the press release. “At the same time, we will be simplifying our business structure, improving our risk profile, and, most importantly, maintaining a strong set of integrated solid waste, recycling and resource management assets across the Northeast.”
After the transaction closes, James W. Bohlig, a senior vice president with Casella, will become the buyer’s CEO.
“Our strategy to sell non-core assets to reduce leverage and improve our balance sheet over the past several quarters is the right plan to drive long-term shareholder value,” Casella said.