(By Balaseshan) Swisher Hygiene Inc. (NASDAQ: SWSH) shares climbed 21.74% in premarket after the provider of essential hygiene and sanitation products said it closed the sale of its waste collection business for about $123.3 million in cash.
Swisher Hygiene completed the sale of Choice Environmental Services subsidiary to Waste Services of Florida Inc., a subsidiary of Progressive Waste Solutions Ltd.
Under the terms of the agreement, the purchase price can be increased by up to $1.75 million upon achievement of a predetermined revenue target and is also subject to customary purchase price adjustments, including revenue and EBITDA metrics. 10% of the purchase price is subject to a holdback and adjustment upon the delivery of audited financial statements to the buyer.
[Related -A Very Intriguing Session Today]
In conjunction with the closing of the transaction, Swisher Hygiene will pay off its Wells Fargo credit facility for $17.2 million, as well as equipment leases associated with the operations of Choice totaling $13.2 million and an outstanding note in the amount of $2 million.
After these payments, Swisher Hygiene's balance debt will be about $13 million, consisting primarily of seller notes. The remainder of the sale proceeds will provide Swisher Hygiene with financial flexibility and support in executing the company's full-service strategy.
Choice Environmental has been in business since 2004 and serves more than 150,000 residential and 7,500 commercial customers in the Southeastern, Southwestern and Central Florida regions through its 320 employees and over 150 collection vehicles by offering complete range of solid waste and recycling collection, transportation, processing and disposal services.
[Related -Insider Weekends – May 27, 2011]
SWSH closed Thursday's regular session at $1.15. The stock has been trading between $1.10 and $4.17 for the past 52 weeks.