“Consistent with the growth strategy we outlined when we acquired NEWP, we are pleased to expand NEWP’s platform with the acquisition of Allegheny,” said Sean Ebnet, senior vice president of Rentech’s wood fibre business.
Allegheny’s wood pellet plant in Youngsville, Pennsylvania has been operating since 1993. The facility processes residuals from local sawmills into wood pellets for sale through big box stores, specialty retailers and bulk sales channels.
NEWP intends to expand the plant’s annual production from approximately 36,000 tons under a four-day workweek to approximately 50,000 tons under a seven-day workweek. The additional production will help meet strong demand for pellets in Pennsylvania and New York. Allegheny is expected to generate approximately $10 million in revenues and $1.5 million in EBITDA annually once operating full-time.
NEWP acquired all of the assets of Allegheny for approximately $7 million in cash, using the proceeds of a 5-year, $8 million term loan from TD Bank, N.A.
NEWP expects to invest over the next 2 years approximately $2 million of available cash in environmental and safety improvements at the plant.
Rentech, Inc. owns and operates wood fibre processing, wood pellet production and nitrogen fertilizer manufacturing businesses.