Rentech, Inc. (NASDAQ:RTK): Acquired Largest Producer Of Wood Pellets


Dallas, Texas 05/08/2014 (FINANCIALSTRENDS) – Los Angeles, California based Rentech, Inc. (NASDAQ:RTK) recently announced to have acquired the largest producer of wood pellets for the U.S. heating market, New England Wood Pellet. With a total annual production capacity of 240,000 tons, New England Wood Pellet operates three wood pellet facilities, all of which are located in the U.S. Northeast. The facilities are strategically located in the largest, domestic wood pellets market.

President and Chief Executive Officer of Rentech, D. Hunt Ramsbottom commented, “New England Wood Pellet is the leader in the growing U.S. market for wood pellets used in heating applications. The acquisition brings additional cash flows and profitability to our wood fiber business. In addition, NEWP’s business broadens our product offerings, customer base and geographic markets.”

Financial Highlights:

Rentech, Inc. (NASDAQ:RTK) acquired all of the equity interests of New England Wood Pellet for $34.5 million in cash. The acquisition was funded from Blackstone/GSO’s $150 million worth of recent investment in Rentech. As per the terms of this acquisition, Rentech will assume New England Wood Pellet’s debt of $13 million and cash of $2.4 million, for a total initial purchase price of approximately $45.1 million.

Acquisition Highlights:

New England Wood Pellet is the leader in growing heating pellets market in the U.S. Northeast with almost 15% market share. The company’s clientele include some of the major retailers including Wal-Mart Stores, Inc. (NYSE:WMT), The Home Depot, Inc. (NYSE:HD), Tractor Supply Company (NASDAQ:TSCO) and Lowe’s Companies, Inc. (NYSE:LOW). The acquisition will open up new geographic markets for Rentech, Inc. (NASDAQ:RTK) while expanding its wood pellet product offerings.

Company Brief:

Rentech, Inc. is the manufacturer and marketer of natural-gas based nitrogen fertilizer products and it also provides wood chipping and wood yard operations services. Yesterday, its stock closed at $2.24, gaining 0.22% from its previous close. The stock has gained almost 29.5% year to date.

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