Casella sells Maine energy facility
Casella Waste Systems, Inc. completed the sale of the property containing its Maine Energy Recovery facility (MERC) to the City of Biddeford, Maine.
As part of the transaction, Biddeford will pay the company total consideration of $6.65 million over 21 years, enter into a new 10 year waste handling agreement, and enter into a new 10 year recycling collection agreement. At closing, the company conveyed to Biddeford the land (excluding any above grade improvements other than the stack) and cellular leases related to antennae on the stack.
The purchase and sale agreement allows for a post-sale transition period, where the company has the option to operate MERC for up to 6 months and the company has 12 months to dismantle all facilities on the property except for the stack that houses the cellular equipment. The company plans to cease operations at MERC by the end of its third quarter fiscal 2013, and at that time begin the process to dismantle the facility.
“In September, we began construction of a new transfer station in Westbrook, Maine to handle the majority of the waste currently disposed of at Maine Energy,” said John W. Casella, chairman and CEO of Casella Waste Systems. “We expect to complete construction at Westbrook in late December, and to begin transferring waste historically directed to Maine Energy, to other company landfills. The sale of Maine Energy is expected to materially improve our financial results, with consolidated Adjusted EBITDA margins improving by roughly 70 basis points, and cash flows increasing by roughly $5.6 million per year due to lower capital expenditures.”