Meridian Waste Solutions sells solid waste group assets

Meridian Waste Solutions Inc., Atlanta, has announced its execution of a definitive agreement to sell the equity interest of its wholly owned subsidiaries that house its solid waste group to Warren Equity Partners fund II in exchange for approximately $87 million in debt assumption and $3 million in cash.

Meridian’s business has historically been comprised of its solid waste collection, transfer and disposal services.  However, the company recently began to shift its focus to growth of its technology units, including biomass and healthcare technology services. Meridian says it has identified several additional acquisition opportunities for value creation at rates that are greater than its solid waste business.

While the solid waste business has driven much of the company’s growth to date, Meridian says the associated debt burden of $95 million, the liquidity required to service that debt at $11 million per year and the substantial capital expenditure needs of the business restrict the its ability to allocate capital to new and more profitable initiatives.

“We were able to scale and grow our solid waste unit very rapidly, but the associated debt burden and cash needs were a bottleneck in restricting our access to cost-effective sources of growth capital,” Jeff Cosman, Meridian’s CEO, says. “Thus, we developed a strategic plan to reduce debt and improve margins and liquidity in ways that are accretive to the company’s value, thereby enabling the company to access and use more growth capital at improved rates of return. The removal of this debt and capital needs provides us the flexibility to pursue higher growth opportunities to grow at a much faster pace in our innovative technology, biomass and technology groups.

“After closing on the sale of our solid waste group, we intend to rebrand the public company as Attis Industries Inc. and currently believe that our remaining assets can generate approximately $3 million in pretax earnings (versus previous years of net losses) in 2018, or approximately 15 cents per common share,” Cosman says. “We also believe that reducing our debt load by more than 90 percent paves the way for us to aggressively pursue several acquisitions that we’re currently evaluating. We believe that by removing this debt bottleneck, we are placing ourselves in a much stronger position for all of our stakeholders, including our shareholders.”