Waste Energy Corp. is advancing two expansion initiatives aimed at increasing its tire processing capacity and building a larger waste recycling and resource recovery platform in the United States. The company has signed a non-binding letter of intent for the potential acquisition of an established tire processing operation together with approximately 10 acres of industrial property and associated operating assets. Waste Energy estimates that, if completed and operated at anticipated levels, the business could process approximately 3 million to 5 million tires annually and generate between $3 million and $5 million in annual revenue. At the same time, the company says its previously announced expansion of its Midland, Texas waste conversion campus remains on track, while final commissioning continues on its initial waste conversion system. Together, the initiatives would expand Waste Energy beyond a single facility by adding tire handling capacity, industrial real estate, operating infrastructure and additional potential revenue streams.

Potential acquisition could process up to 5 million tires annually

Waste Energy has entered into a signed non-binding letter of intent covering the proposed acquisition of an existing tire processing business. The contemplated transaction carries a purchase price of approximately $1.2 million and includes roughly 10 acres of industrial property together with the operating assets associated with the business.

Under the structure currently being considered, Waste Energy would own 51% of the acquisition entity. Management estimates that the operation could potentially process between 3 million and 5 million tires per year if the acquisition is completed and anticipated operating levels are achieved.

Company estimates potential revenue of $3 million to $5 million

Based on preliminary operating plans and information currently available to management, Waste Energy estimates that the tire processing operation could generate approximately $3 million to $5 million in annual revenue.

The company emphasized that both the processing volumes and revenue figures are preliminary estimates rather than guaranteed results. Actual performance would depend on completion of the transaction and subsequent operating conditions.

Acquisition remains subject to due diligence

The letter of intent is non-binding with respect to completion of the acquisition. Waste Energy and the other parties are currently conducting due diligence and negotiating financing and definitive transaction documents.

The company said there is no assurance that definitive agreements will ultimately be signed or that the acquisition will close on the terms currently contemplated. Waste Energy has therefore chosen not to disclose the identity or location of the tire processing operation while negotiations continue.

Waste Energy targets larger tire recycling platform

Chairman and CEO Scott Gallagher said the potential acquisition reflects Waste Energy’s strategy of developing an environmental infrastructure company rather than building its business around a single facility or conversion technology.

If completed, the transaction could substantially increase the number of end-of-life tires moving through the company’s operating platform while adding an established processing operation and another potential source of revenue.

Midland expansion remains on schedule

Alongside the proposed tire processing acquisition, Waste Energy continues to advance the previously announced expansion of its flagship waste conversion campus in Midland, Texas. The company said the transaction remains on track for closing.

The expansion is expected to significantly increase the physical area available for waste processing, tire handling and future conversion activities. Waste Energy plans to disclose further details about the expanded Midland site after the transaction has been completed.

Initial Midland conversion system approaches commercial operation

Waste Energy is also continuing final commissioning of its first waste conversion system at the Midland facility. The company is working toward expanded commercial operations while evaluating additional opportunities that complement its waste processing and resource recovery strategy.

The Midland campus is intended to serve as the foundation of an integrated platform initially focused on waste tire collection, processing, recycling and conversion. Waste Energy plans to broaden both its capabilities and geographic footprint as operations develop.

Strategy combines tire collection, processing and resource recovery

The two expansion initiatives indicate that Waste Energy is seeking to build infrastructure across multiple stages of the end-of-life tire value chain. An established tire processing operation could provide additional handling capacity and feedstock flows, while the Midland facility is being developed around waste conversion and recovery activities.

For tire recycling operations, combining collection and preprocessing infrastructure with downstream conversion capacity can provide greater control over feedstock supply and create additional options for recovering commercial value from end-of-life tires.

Expansion plans remain forward-looking

Waste Energy cautioned that the proposed tire processing acquisition, projected processing volumes and revenues, Midland expansion and commissioning schedule are all subject to risks and uncertainties. The acquisition remains at the non-binding letter-of-intent stage, and completion of either expansion initiative is not guaranteed.

If the transactions proceed as planned, however, Waste Energy expects them to expand its physical footprint, tire processing capacity and operating infrastructure as the company develops a larger waste recycling and resource recovery business.

Original announcement by Waste Energy Corp. via ACCESS Newswire.