Image Source:
Wood Pellets Home Depot Canada
LOS ANGELES--(BUSINESS WIRE)--Rentech, Inc. (NASDAQ: RTK) today appear that it has acquired New England Copse Pellet (NEWP), the better ambassador of copse pellets for the U.S. heating market. A accelerate presentation apropos today's advertisement appears on Rentech’s website, www.rentechinc.com. The Company’s administration will altercate the accretion on its aboriginal division balance appointment call, which is appointed for May 13, 2014.
Image Source:
NEWP, accustomed in 1992, operates three copse pellet accessories with a accumulated anniversary assembly accommodation of 240,000 tons. The accessories are strategically amid in the U.S. Northeast, which is the better calm bazaar for burning of copse pellets for heating. NEWP generated EBITDA of about $7.4 actor in 2013. Further account of EBITDA, a non-GAAP banking measure, and a adaptation of NEWP’s EBITDA to operating assets accept been included beneath in this columnist release.
“NEWP is the baton in the growing U.S. bazaar for copse pellets acclimated in heating applications. The accretion brings added banknote flows and advantage to our copse fibre business. In addition, NEWP’s business broadens our artefact offerings, chump abject and geographic markets,” said D. Hunt Ramsbottom, admiral and arch controlling administrator of Rentech.
Acquisition Highlights
NEWP is the baton in a absolute and growing market
Known for its aerial affection products, NEWP commands an almost 15% allotment of the bazaar for heating pellets in the U.S. Northeast. The aggregation is one of the better suppliers of copse pellets to above retailers including Home Depot, Lowe’s, Tractor Accumulation and Wal-Mart.
Wood pellets austere in avant-garde heating accessories are a apple-pie and acceptable antecedent of economical heating. Prices for copse pellets are aggressive with delivered retail prices for accustomed gas, and lower than prices for heating oil, propane, or electricity. Copse pellet prices accept historically been added abiding than prices of heating oil or accustomed gas. Low citizenry body in NEWP’s markets makes the administration of accustomed gas inefficient and expensive.
Image Source:
Approximately 1.5 actor bags of copse pellets are captivated annually in the U.S. Northeast. According to absolute forecasts, copse pellet burning in the arena is accepted to admission at an anniversary advance amount of 7% through 2018. Chump appeal for copse pellets in this bazaar exceeds accessible bounded production.
NEWP diversifies Rentech’s copse pellet business
By accouterment admission to the calm heating market, the accretion broadens Rentech’s copse pellet artefact offerings, expands its chump base, and opens up new geographic markets.
NEWP has a able banking profile
The accretion is anon accretive to Rentech’s copse fibre processing business. Consistent with its 2013 performance, NEWP’s business is forecasted to accept revenues of about $44.8 million, operating assets of about $4.6 million and EBITDA of about $7.6 million for the twelve months catastrophe December 31, 2014. A adaptation of forecasted EBITDA to operating assets for NEWP is included below.
Financial Highlights of the Acquisition
Image Source:
Rentech acquired all of the disinterestedness interests of NEWP for $34.5 actor in cash, adjourned from gain of Blackstone/GSO’s contempo $150 actor advance in Rentech. Rentech will accept NEWP’s banknote of $2.4 actor and debt of about $13 million, for a absolute antecedent acquirement amount of $45.1 million. The antecedent accretion amount equals 6.1 times NEWP’s 2013 EBITDA. Rentech expects an after-tax acknowledgment on the accretion in the mid-teens.
The acquirement acceding provides for up to $5 million of abeyant earn-out consideration, to be paid in banknote to the sellers. The earn-out application would be becoming ratably if NEWP’s 2014 EBITDA, as authentic in the acquirement agreement, is amid $7.3 actor and $8.0 million. The earn-out application would not admission if NEWP’s 2014 EBITDA were to beat $8 million.
Disclosure Apropos Non-GAAP Banking Measures
EBITDA is authentic as operating assets additional abrasion expense. EBITDA is acclimated as a added banking admeasurement by administration and by alien users of Rentech’s banking statements, such as investors and bartering banks, to assess:
EBITDA should not be advised an another to net income, operating income, net banknote provided by operating activities or any added admeasurement of banking achievement or clamminess presented in accordance with GAAP. EBITDA may accept absolute limitations as a achievement admeasurement because it excludes items that are all-important elements of Rentech’s costs and operations. In addition, EBITDA presented by added companies may not be commensurable to Rentech’s presentation, back anniversary aggregation may ascertain these agreement differently.
The table beneath reconciles NEWP’s 2013 EBITDA to operating assets for the twelve months concluded December 31, 2013. The table additionally reconciles NEWP’s forecasted EBITDA to operating assets for the twelve months catastrophe December 31, 2014.
Image Source:
Twelve MonthsEndedDecember 31, 2013
Twelve MonthsEndingDecember 31, 20141
1In 2014, Rentech will admit EBITDA from the date of the accretion through December 31, 2014.
About Rentech, Inc.
Rentech, Inc. (NASDAQ: RTK) owns and operates copse fibre processing, copse pellet assembly and nitrogen fertilizer accomplishment businesses. Rentech offers a abounding ambit of chip copse fibre casework for bartering and automated barter about the world, including copse chipping services, operations, marketing, trading and barge loading, through its subsidiary, Fulghum Fibres. The Company’s New England Copse Pellet accessory is a arch ambassador of bagged copse pellets for the U.S. heating market. Rentech is developing copse pellet accessories in East Canada to accumulation pellets to utilities. Rentech articles and sells nitrogen fertilizer through its about traded subsidiary, Rentech Nitrogen Partners, L.P. (NYSE: RNF). Please appointment www.rentechinc.com and www.rentechnitrogen.com for added information.
Forward Looking Statements
Image Source:
This account absolution contains advanced statements as authentic in the Private Securities Litigation Reform Act of 1995 about affairs such as: accepted advance in copse pellet burning in the Northeast; NEWP’s accepted banking achievement and the acknowledgment on the Company’s investment; and the Company’s copse fibre processing business. These statements are based on management’s accepted expectations and absolute after-effects may alter materially as a aftereffect of assorted risks and uncertainties. Factors that could account absolute after-effects to alter from those reflected in the advanced statements are set alternating in Rentech’s columnist releases and alternate letters filed with the Securities and Exchange Commission, which are accessible via Rentech’s website at www.rentechinc.com. The advanced statements in this account absolution are fabricated as of the date of this absolution and Rentech does not undertake to alter or amend these advanced statements, except to the admeasurement that it is appropriate to do so beneath applicative law.
Image Source:
Image Source:
Image Source:
Image Source:
Image Source:
Image Source:
Image Source: