With a new infusion of $15 million from a European private equity fund that specializes in environmental-friendly investments, U.S.-based engineered plastics recycler MBA Polymers Inc. is now in a position to build as many as three new plants over the next few years.
We have more customers than we can supply and the sources of material are there, said MBA founder and President Mike Biddle in a Feb. 25 phone interview. We anticipate that in the not-too-distant future and certainly before the end of the year that we will be able to announce where the company's next plant will be built.
MBA currently has plants in Worksop, England; Guangzhou, China; and Kematan, Austria. The firm has no plants in the United States, where it has its headquarters and research and development operations in Richmond, Calif. Its sales doubled in 2010 to $36 million.
We have irons in the fire in North America, Europe and Asia. We have a couple of locations in our cross hairs, said Biddle. His company takes electronics, computer and appliance waste and automotive shredder residue and uses proprietary technology to separate out polypropylene, polystyrene and ABS and make recycled pellets.
There is certainly material in those regions, he said.
Biddle said that it would take 12-18 months to construct a plant and get it up and running, and that the capacity of the new plants would likely be similar in size 80 million to 160 million pounds per year as its existing plants.
The infusion of funding from Ambienta SGR SpA, announced Feb. 22, brings the total funds MBA has raised since last summer to $40 million. It also gives MBA a partnership that involves more than just equity funding with a company that has solid knowledge of the European recycling market.
Milan-based Ambienta SGR now is a significant minority shareholder in MBA; and Nino Tronchetti Provera, CEO and founding partner of Ambienta SGR, will get a seat on the MBA board.
The board seat means that they are a pretty substantial investor, Biddle said. They are a big player in Europe. This opens up the door for us a lot in southern Europe and Italy. They know how the recycling markets work there.
It also raises the question of whether MBA is considering an initial public offering.
We are always looking for ways to raise additional growth capital, Biddle said. We have always had that on our radar. An IPO gets to be more of a possibility as we grow. It's definitely a possibility.
But Biddle cautioned that whether an IPO occurs is dependant on several things.
A lot of factors will determine if and when we take that route, Biddle said. But eventually our investors will want some liquidity.
The partnership with Ambienta provides advantages to both firms.
It fits into our strategy of focusing on companies delivering real fundamental environmental and economic value, with no technology risk, but strong and solid growth potential, Provera said. I really think that Ambienta SGR will be able to help MBA Polymers' management in the transformation of this great potential into financial results.
Pellegrini & Mendoza LLP acted as special New York counsel to Ambienta SGR. Morgan, Lewis & Bockius LLP of Philadelphia acted as special counsel to MBA Polymers.
MBA also announced Feb. 22 that Keating Capital Inc. of Greenwood Village, Colo., had made an additional $900,000 investment in MBA.
MBA's newest plant, a joint venture with European Metal Recycling Ltd. of Warrington, England, started last fall. It is expected to be operating at an annual rate of 120 million pounds by the middle of the year.
MBA said its plants use less than 10 percent of the energy and natural resources of a virgin resin plant. Its separation technology can sort plastics by resin type, as well as by grade, such as injection, extrusion and flame-retardant grades of PS.