![Vertex Energy Sells Heartland UMO Collection and Refining Business](http://media.assettype.com/baseoilnews%2F2023-02%2F97506581-8f3a-4fcb-97ce-713952d60908%2Flubricant_refinery_dreamsntime.jpg?w=480&auto=format%2Ccompress&fit=max)
UMO divestiture significantly streamlines business, improving focus on conventional fuels refining operations and initial renewable diesel production operations at Mobile, AL facility
Net proceeds of $85 million provide substantial liquidity to improve balance sheet health, as well as pursue incremental organic investment opportunities
February 01, 2023 08:30 AM Eastern Standard Time
HOUSTON--(BUSINESS WIRE)--Vertex Energy, Inc. (NASDAQ:VTNR) ("Vertex" or the "Company"), a leading specialty refiner and marketer of high-quality refined products, today announced that it has sold its Heartland used motor oil collection and recycling business to a wholly owned subsidiary of GFL Environmental, Inc. ("GFL"), for total cash consideration of $90 million. The transaction was completed pursuant to the entry into a sale and purchase agreement which closed at the time of signing, on February 1, 2023.
Under the terms of the transaction, GFL acquired Vertex’s 20 million gallon per year Heartland used motor oil (UMO) refinery in Ohio and the associated Heartland UMO collections business.
STRATEGIC RATIONALE
Transaction facilitates continued improvement of balance sheet health.
After fees, total net cash proceeds from the transaction are approximately $85 million. The Company may use some of the transaction proceeds to reduce outstanding debt on its balance sheet.
Transaction supports capital deployment into higher-return energy transition opportunities.
This transaction positions Vertex to redeploy capital into energy transition assets of scale.
Vertex continues to examine potential investment opportunities across the sustainable fuels sector, including further development of its renewable diesel production business, as well as potential new opportunities in the rapidly growing Sustainable Aviation Fuel (SAF) market.
Management believes the transition to the production of lower-carbon, sustainable fuels and products represents an attractive investment opportunity that positions the Company to achieve meaningful growth in Adjusted EBITDA and free cash flow long-term.
Transaction enhances strategic and operational focus on its core refining operations.
Vertex believes the resulting streamlined asset footprint will enable further operational focus and enhanced efficiencies throughout the Company.
The improved operational focus on the Mobile refining facility comes almost concurrently with anticipated mechanical completion and subsequent start-up of initial renewable diesel production which is currently expected to be completed in the second quarter 2023.
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