Rentech Inc. on Thursday said that it acquired New England Wood Pellet, considered the largest producer of wood pellets for the U.S. heating market.
Terms of the deal were not disclosed.
The purchase diversifies the Los Angeles company's wood processing business and opens up new geographic markets, Rentech said. This is the first large deal announced since Rentech received a $150 million investment from a unit of New York private equity giant Blackstone.
New England Wood Pellet, based in Jaffrey, N.H., operates three wood pellet facilities in the northeastern U.S. and has a combined annual production capacity of 240,000 tons. Its largest customers include Home Depot, Lowe’s and Wal-Mart. Earnings before interest, taxes, depreciation, and amortization last year was about $7.4 million.
Rentech recently completed its transition out of the alternative biofuels business and into wood fibre processing and wood pellet production.
"The acquisition brings additional cash flows and profitability to our wood fibre business," Chief Executive D. Hunt Ramsbottom said in a statement.
The acquisition was announced after the markets closed. Shares earlier closed up 3 cents, or 1.4 percent, to $2.15 on the Nasdaq.