TOMRA has signed a letter of intent to make an equity investment in Wise Recycling LLC. Wise Recycling recently acquired 23 non-deposit state operations from Reynolds Recycling Division effective March 1, 1998. This same date, TOMRA acquired the Reynolds recycling and materials management operations in California and 4 non-deposit states.
TOMRA will invest USD 7.5 million in new equity for a 50% interest in Wise Recycling. TOMRA expect to receive annually net income of USD 1.2 million from the Joint Venture under equity accounting treatment. Annual sales approximate USD 110 million, but will not be consolidated under equity accounting treatment.
The Joint Venture will maintain the national presence and identity that existed under Reynolds Recycling. The current operation is focusing on collecting primarily aluminum containers through 250 convenience centers and 60 service centers, processed in 22 processing plants. Both TOMRA and Wise see significant opportunities to leverage this national presence through increased volume and profitability. Longer term (2-3 years), TOMRA believes the national presence will be critical to the development and rollout of a US non-deposit strategy which will combine TOMRA`s unique technology and collection systems with Wise`s materials marketing expertise.
Questions can be directed to President/CEO Erik Thorsen or CFO Helge Nerland at telephone +47 66 79 91 00.
Asker, 15 June 1998
TOMRA SYSTEMS ASA