KBF POLLUTION MANAGEMENT INC - Executes Letter of Intent to AcquireEnvironmental Services Division - of R.M. Jones & Co., Inc.
New York, New York, Dec 19, 2001 (Market News Publishing via COMTEX) -- KBF Pollution Management, Inc. ("KBF") announced its execution of a non-binding letter of intent with R.M. Jones & Co., Inc., a privately-held company headquartered in Farmington, Connecticut, pursuant to which, and subject to satisfaction of certain conditions including the completion of due diligence and execution of a definitive agreement between the companies, KBF would acquire the environmental services division of R.M. Jones.
The acquisition would transform KBF from a $3.2 million revenue company just recently breaking-even into a profitable $16 million revenue company with a full suite of environmental service capabilities and powerful competitive advantages in KBF's patented Selective Separation Technology(TM) ("SST(TM)") (U.S. Pat. Nos.: 5,753,125; 5,908,559; 6,254,782) and other patent-pending and proprietary resource recovery technologies. KBF has secured a commitment for debt financing for the acquisition from a commercial lender with the guarantee of the New Jersey Economic Development Authority and the personal guarantee of KBF's Chairman and Chief Executive Officer, Lawrence M. Kreisler.
R.M. Jones was founded in 1962, and has been providing hazardous waste management services to clients throughout New England since 1980. The environmental services division of R.M. Jones currently has several hundred active customers with over five thousand different industrial wastes. In 1998, R.M. Jones acquired an interest in a Part B permitted treatment, storage and transfer facility in Lowell, Massachusetts. This facility is one of only seven such facilities in New England and managed well over thirty thousand containers of hazardous industrial waste in calendar year 2000. It was the only facility in New England to receive the Environmental Information Ltd. award for perfect regulatory compliance in 1999 and 2000, and is expected to receive this award again for 2001. The acquisition is anticipated to include R.M. Jones' interest in this facility.
Underscoring the impact of the proposed acquisition on KBF's continuing development, Kevin Kreisler, KBF's President, stated that, "we expect the acquisition to accomplish several objectives critical to KBF's continuing evolution. First, KBF will have effectively diversified its service capabilities and acquired critical transfer and distribution infrastructure. Next, and more importantly, KBF will bring on additional management and expert sales and service support personnel. R.M. Jones's existing customer base brings substantial market share and increased sales to KBF's facility -- increased recycling service volume is of particular importance now to KBF given the economies of scale which operate above the break-even point of KBF's patented recycling processes. Finally, R.M. Jones' profitability and approximately $13 million in annual environmental service revenue are expected to bring added strength, stability and profitability to KBF, which has clear positive implications for shareholder value."
James Green, R.M. Jones' Vice President and KBF's Senior Vice President of Sales, added "this is an exciting development for both KBF and R.M. Jones that is consistent with our mutual long-term growth strategies. Since the inception of R.M. Jones' relationship with KBF, R.M. Jones has enjoyed accelerated growth rates of sales and profitability due to KBF's service capabilities -- capabilities premised on KBF's technologies and powerful regulatory provisions that incentivise recycling. Through the acquisition, we expect to leverage R.M. Jones' sales and distribution assets with KBF's revolutionary technologies and process infrastructure, in the process establishing KBF as the premier recycling service provider in the nation."
KBF is targeting the combined company to generate $18 million in sales in the first year after the acquisition, and expects revenue growth at a rate in excess of 20% per year for at least the next 36 months once the acquisition is completed. KBF projects revenues exceeding $25 million within two years in the absence of additional acquisitions.
Looking ahead, Mr. Kreisler added that, "KBF's technologies are engineered to maximize recycling and manufacturing efficiencies -- efficiencies which readily translate to high degrees of profitability. KBF's business model has always been about building regional recycling and manufacturing centers based on KBF's technological capabilities, and to support these facilities with a network of permitted transfer and distribution facilities. While we plan to fund our development into this model with increases in sales and continued investment in infrastructure development, we expect to complement our efforts with additional acquisition opportunities that enhance shareholder value." About KBF Pollution Management, Inc.
KBF is a growth-stage company that is working to establish itself as the premier recycling services provider in the nation. KBF's Paterson, New Jersey flagship recycling and commodity manufacturing center has been designed for the large-scale application of KBF's Selective Separation Technology(TM) ("SST(TM)") (U.S. Pat. Nos.: 5,753,125; 5,908,559; 6,254,782) and other patent-pending and proprietary resource recovery technologies. These process technologies separate, remove and recover a wide range of metals from liquid and solid wastes as well as other production and manufacturing media. Use of SST(TM) and its related processes enables KBF to competitively recycle a much broader array of hazardous and non-hazardous waste than any other recycling service provider known to KBF. Wastes managed with KBF's technologies become products that are comparable and superior to the quality of virgin ore material extracted from the ground. Use of KBF's technologies eliminates the federally mandated 'cradle-to-grave' liability for which a waste generator would otherwise remain perpetually liable. KBF's technologies apply to manufacturing, industrial and municipal waste processes that contain metals or otherwise produce a metal bearing waste by-product. KBF also provides regulatory compliance support services to its customers and is developing an environmental services business-to-business website, TSDonline.com(TM).
Safe Harbor Statement
The foregoing discussion contains forward-looking statements that are based on current expectations, and includes statements regarding KBF's expectations, beliefs, intentions, or strategies regarding the future. Actual results, including the timing and amount of anticipated revenues, may differ due to such factors as: the availability of financing for expansion and acquisitions; the performance of our customers; commodities valuation, regulatory delays; dealings with governmental entities; economic and other conditions affecting the financial ability of actual and prospective clients; and, other risks generally affecting the timing and financing of projects and transactions, as well as other factors. These and other risks associated with KBF's business can be found in its Annual Report on Form 10-KSB for the year ended December 31, 2000, and other periodic filings with the SEC. KBF Pollution Management, Inc. trades on the over the counter bulletin board maintained by the NASD under the symbol "KBFP."
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