Boston, MA 05/22/2014 (wallstreetpr) – Rentech, Inc. (NASDAQ:RTK) on May 1, 2014 announced that it acquired New England Wood Pellet (NEWP) in a deal worth $45 million approximately. New England Wood Pellet is largest wood pellets producer for the U.S. market. Rentech acquired the entire equity interests of NEWP in cash valued at $34.5 million.
Statement from the CEO and President of Rentech
The CEO and President of Rentech, Inc. (NASDAQ:RTK), D. Hunt Rams bottom, said that NEWP is an established market leader and contributes in growing U.S. market for wood pellets which are used in the heating applications. The acquisition of NEWP adds yet another feather to the cap of Rentech, and this will help in adding profitability, as well as cash flows to the company’s wood fibre business. Apart from this, the acquisition of NEWP also adds to the broadening of customer base, geographic markets as well as product offerings.
Market Share of NEWP
NEWP is renowned for high-end products. It attracts around 15% shares of the marketplace in the U.S. Northeast for heating pellets. NEWP is also among the largest supplier of wood pellets which are provided to some of the big retailers such as Wal-Mart, Lowe’s, Home Depot and Tractor Supply.
Benefits of Wood pellets in Modern Era
The wood pellets are used for burning in almost all the heating appliances of today. The biggest advantage of wood pellets is that this is the most convenient and clean source of effective and finance-friendly heating. Also, the prices of this burning source are completing directly with the retail price of natural gas. Also, the price of wood pellets is much lower than the price of electricity, heating oil or propane.
Usage in the U.S. Markets
Around 1.5 million tons of wood pellets in a year are used in the U.S. Northeast. Also, the independent forecasts hint towards an increasing consumption of wood pellets in this particular region with the 7% annual growth rate through 2018.
