Rentech's NEWP acquires Allegheny Pellet
New England Wood Pellet (NEWP), a subsidiary of Rentech, has acquired the assets of Allegheny Pellet Corp.
The acquisition, Rentech says, expands NEWP's market position as the largest producer of wood pellets for the US heating market.
Allegheny's wood pellet plant in Youngsville, Pennsylvania has been operating since 1993. The facility processes residuals from local sawmills into wood pellets for sale through big box stores, specialty retailers and bulk sales channels. Allegheny will be fully integrated into NEWP and will operate as its fourth pellet plant.
NEWP intends to expand the plant's annual production from approximately 36,000 tonnes under a four-day workweek to approximately 50,000 tons under a seven-day workweek. The additional production will help meet strong demand for pellets in Pennsylvania and New York.
NEWP acquired all of the assets of Allegheny for approximately $7 million (€6 million) in cash, using the proceeds of a five-year, $8 million term loan from TD Bank, N.A.
NEWP expects to invest over the next two years approximately $2 million of available cash in environmental and safety improvements at the plant.