(By Balaseshan) Casella Waste Systems Inc.
), which provides solid waste management services, said it has agreed to sell its Maine Energy Recovery facility to the City of Biddeford, Maine.
At a special meeting on July 31, Biddeford's nine-member council voted to enter into the purchase and sale agreement for the facility, and the agreement was subsequently executed by the company and Biddeford on August 1.
As per the purchase and sale agreement, Biddeford will pay the company total consideration of $6.65 million over 20 years, enter into a new 10 year waste handling agreement, and enter into a new 10 year recycling collection agreement.
The sale of the facility is set to close by November 15, 2012, with the closing contingent upon certain conditions precedent for the buyer and the seller.
These conditions precedent include the company successfully receiving a final permit modification at the Juniper Ridge Landfill in Old Town, Maine to accept municipal solid waste (MSW). Currently, Juniper Ridge Landfill may only accept MSW as a by-pass stream from waste-to-energy facilities.
The company said Biddeford had approached Casella Waste several times over the past ten years to find a solution to shut down the 25-year old waste-to-energy facility to redevelop their downtown area.
Given current low energy prices and our belief that a successful resource management strategy combines waste reduction, an effective recycling solution and waste disposal in a low-emission landfill, we have structured a transaction that is favorable for our shareholders," said John Casella, Chief Executive of Casella Waste.
CWST is trading up 4.69% at $5.36 on Friday. The stock has been trading between $4.50 and $7.15 for the past 52 weeks.