Axion buys Y City recycling assets

Published: November 22, 2013 12:24 pm ET

Related to this story

Topics Mergers & Acquisitions, Construction, Extrusion, Pipe/Profile/Tubing, Recycling

Axion International Holdings Inc., a composite railroad tie and buildings product maker, is acquiring the assets of a plastics recycler in a move that will better control raw material quality and add revenue.

Axion, of New Providence, N.J., already had a previous business relationship with Y City Recycling of Zanesville, Ohio, before acquiring that company’s assets.

“We need to control the supply chain of our materials. In this business, it’s a difficult venture when you’ve’ got multiple people in the supply chain, from a costing standpoint and from a quality standpoint. So it makes sense for us to be in the material supply business of the material what we use in our products,” said Steve Silverman, CEO of Axion in a Nov. 22 telephone interview shortly after the deal was announced.

While this vertical integration was one driver to make the deal, the CEO said there also were other considerations.

“The second driving force is it enables us to control quality better. And the third driving force is it adds revenue to the company, it gives us diversification,” he said.

Axion will both internalize volume from the plastics recycling operation and sell to third-party companies.

Y City Recycling had been supplying recycled plastic for the company’s products. The two companies were both in a shared a Waco, Texas, facility that Axion took operational control over earlier this year.

The latest transaction includes assets of both Y City Recycling’s Zanesville plant as well as recycling equipment in Waco, Silverman said.

Paperwork filed with the U.S. Securities and Exchange Commission shows Axion paid The Community Bank of Zanesville $3.56 million for “certain equipment, inventory and supplies related to the operation” of Y City Recycling.

In connection with that transaction, the filing states, the company struck an asset purchase agreement with Y City Recycling sellers Brian Coll and Renee Coll for $2.08 million “which Axion Recycling paid in cash to the Bank to discharge in full certain indebtedness of Y City to the Bank.”

No money additional money was paid to the Colls, Silverman said.

Y City Recycling began operations after buying the assets of another recycling firm, Coll Materials Group LLC, where Brian Coll was CEO. Coll Materials had defaulted on loans from Community Bank, and the bank sold the assets of the company to Y City, Plastics News reported earlier this year.

“Our transaction was with Y City and that’s the assets that we purchased. We felt it was a good business transaction for us. It was assets that were available to get purchased. And we purchased them. And we’re going to start a new revenue toward inside our company and we’re excited about it,” Silverman said.

Axion started a new subsidiary, Axion Recycled Plastics Inc., which hired key employees and managers from Y City Recycling. Both Brian Coll and Renee Coll were in a meeting at the Zanesville facility and not available for immediate comment on Nov. 22.

Three large Axion investors also chipped in $3 million to repay certain liabilities and to fund future equipment needs as well as working capital. Silverman described the liabilities as “day-to-day payables.”

Axion also has a new $2.5 million revolving line of credit in place.

“We’re pumped up. We’re excited,” Silverman said. “We obviously think this is a good business. From a financial transaction standpoint, we had a great opportunity and we took advantage of it. Our investors supported us. We know it helps Axion grow.”

“When you are a start-up company in the public markets, you need to increase your revenues. You do that through vertical integration, you do that through acquisition or you do that organically. And we’re doing all three,” he said.


Comments

Axion buys Y City recycling assets

Published: November 22, 2013 12:24 pm ET

Post Your Comments


Back to story


More stories

Image

Coca-Cola closing its recycling division

October 30, 2014 3:50 pm ET

Beverage giant says it wants to work with suppliers    More

Image

Xten may shut down, working on sale to Commercial Plastics

October 29, 2014 5:49 pm ET

Xten Industries LLC is working on a sale to Commercial Plastics Co. of Mundelein, Ill. Xten, an injection molder based in Kenosha, Wis., filed a...    More

Image

Trex sets quarterly sales record with more business on tap

October 28, 2014 1:09 pm ET

Composite deck maker Trex Co. Inc. set sales and earnings records for the third quarter of 2014 and is on track to see revenue reach $388 million for ...    More

Image

Buildings could reach new heights with help from plastic-coated rope

October 28, 2014 1:55 pm ET

Skyscrapers will be able to soar to greater heights with help from plastic in the latest lift technology developed by Kone Corp., an elevator and...    More

Image

TMI has new private equity owner

October 27, 2014 2:03 pm ET

Pittsburgh-based TMI International LLC, a maker of PVC-based film, panel and sheet products as well as PVC-coated curtains and screens, has been acqui...    More

Market Reports

Pipe, Profile & Tubing Extrusion Market Trends

This report provides in-depth analysis of current trends, statistics and innovations in product design and production impacting the PP&T industry in North America.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events