APRIL 2011
                                        

Casella Waste divests non-integrated recycling assets

Casella Waste Systems, Inc. has reached a definitive agreement to sell select non-integrated recycling assets to a new company formed by Pegasus Capital Advisors, L.P. and Intersection, LLC for $130.4 million in gross proceeds.

The anticipated net cash proceeds of $117.4 million are expected to be used to repay Senior Secured Term Loan B borrowings.

“With this important transaction, we will have made substantial progress towards our objective to delever the balance sheet,” said John W. Casella, chairman and chief executive officer of Casella Waste Systems. “

Craig Cogut, founder and managing partner of Pegasus Capital Advisors, L.P., will serve as chairman of the new company.

Pursuant to the purchase and sale agreement and related agreements entered into by Casella and the buyer on January 23, 2011, the company will divest the following assets:

FCR recycling assets located outside the Company’s core operating region of New York, Massachusetts, Vermont, New Hampshire, Maine and northern Pennsylvania, including 17 material recycling facilities (MRF), 1 transfer station and certain related intellectual property assets. Following the transaction, Casella will retain four integrated FCR MRFs located in its core operating region.

Closing of the transaction is expected to be in the fourth quarter of fiscal year 2011 and is subject to customary closing conditions. In the event that the buyer failed to consummate the transaction by March 15, 2011, following the satisfaction by the company of all closing conditions, the buyer will be required to pay a reverse termination fee of $6.5 million.

At the closing of the transaction, Jim Bohlig, an officer and board member of the company, will join the buyer as their chief executive officer.

Casella expects to receive $130.4 million of gross proceeds from the transaction. After netting transaction costs and cash taxes payable in conjunction with the divestitures, Casella expects the net cash proceeds to amount to $117.4 million.