Canusa Corp. and Hershman Capital Corp. have signed a Letter of Intent to merge the Fiber Group of Canusa and Hershman Recycling, Inc. into a new company. The new company will be called Canusa-Hershman Recycling Corp.
Senior management will be co-headquartered in Branford, CT and Baltimore, MD. Ethan Hershman will be co-chairman and CEO, Bruce Fleming, co-chairman, Jonathan Sloan, president and Todd Laggis, CFO of the new company.
Hershman Recycling, Inc., which operates from Branford, CT and satellite offices in Texas and California, currently trades more than 25,000 tons per month of fiber and 1,000 tons per month of plastics.
Canusa’s Fiber Group, which operates from Baltimore, with satellite offices in Boston; Buffalo; Montreal; Richmond, Va.; and St Albans, Vt., trades more than 30,000 tons per month of fiber and obsolete roll stock.
Additionally, Canusa operates two paper stock plants in Baltimore, and St Albans, VT and both companies have numerous baler installations and joint-venture agreements with paper mills and generators of fiber.
The newly combined company expects sales in excess of $100 million annually. The merger is expected to be finalized during the second quarter of 2002. Specifically not included in the merger are Canusa’s Kraft Group, Capitol Fiber, Inc, ANW Crestwood, Inc., and Evergreen Fibres, Inc.
Bruce Fleming said of the merger, “The trend of the paper industry has been for greater consolidation amongst the paper mills as well as the printers and industrial users of paper. It’s only logical that the vendors of recycled fiber would consolidate to meet the needs of a more demanding market place”.
Jonathan Sloan, president of Canusa’s Fiber Group and former vice president, Materials Marketing Group, for BFI, said, “We have a great opportunity to expand our services to our customers both large and small through this merger. Rather than two moderate-sized companies with limited resources, we will now have one larger company able to compete effectively in domestic and export markets. Look for us to be more active in both arenas”.
Ethan Hershman who will be CEO of the new company said, “Canusa-Hershman will be not only the largest independent fiber management firm east of Chicago, we intend for it to be the best. Canusa and Hershman have spent some time studying this merger and we believe our systems and cultures are extremely compatible. We will look forward to completing this merger and then determining if other merger or acquisition candidates exist for us. This is just the first step in what we expect will be a growing, vibrant company."
Hershman added that one key reason for the decision to merge the two companies is the drive toward consolidation in the forest products and recycling industry. By combining two decent sized companies into one much larger company the newly created group is able to have a better control over markets for its material.
While the two companies are primarily focused on the East Coast, there are some opportunities for growing the operations through other acquisitions or further development, especially in other regions of the country.
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