ISA sells waste services business unit

Industrial Services of America Inc. (ISA), Louisville, Kentucky, has announced the sale of its waste services segment. Although an ISA news release does not disclose the buyer, a purchase agreement filed with the Securities and Exchange Commission indicates the buyer is Arizona-based Compactor Rentals of America LLC.

The ISA news release says the company and its WESSCO LLC subsidiary have “entered into an asset purchase agreement pursuant to which the company sold its ’waste services segment,’ consisting of substantially all of the assets used in the company’s commercial, retail and industrial waste and recycling management services business that the company operated under the name Computerized Waste Systems or CWS; and the company’s equipment sales, rental and maintenance business for the commercial and industrial waste and recycling industry that the company operated under the name Waste Equipment Sales and Service Co.”

ISA says it “received cash consideration at closing of $7.5 million, less $150,000 retained by the purchaser, which will be released to the company or retained by the purchaser in connection with any working capital adjustment.”

ISA also says the purchase agreement includes “a restrictive covenant under which the company will be prohibited from competing with the waste services segment for five years following the closing.”

According to its news release, ISA is using the proceeds to repay debts owed to Bank of Kentucky Inc.; to repay a term loan from Wells Fargo Bank; and to pay all outstanding amounts on ISA’s $5 million revolving line of credit with Wells Fargo.

“The company is pleased with completing this transaction and providing liquidity to the business,” says ISA President Sean Garber.  “Following a very challenging year in the metal commodity markets, the company believes the sale of our waste services segment is a critical step in positively positioning the company for future growth and opportunity.”

The remaining business units of ISA buy, process and market ferrous and nonferrous metals and other recyclable commodities and sell used auto parts.