A Pennsylvania biomass wood pellet manufacturer has acquired Dry Creek Products in Arcade and shifted its headquarters to Wellsville in a deal aided by a $3.2 million investment from state pension funds.
BioMaxx Inc., which has a 41-employee biomass wood pellet plant in Ulysses, Pa., about 25 miles south of Wellsville, has moved 10 jobs to its new office in Wellsville.
The acquisition of Dry Creek, which has 10 employees at its Arcade plant, will triple the capacity of BioMaxx to produce wood pellets, said Christopher
J. Brodhead, a vice president at DeltaPoint Capital Management, a Rochester private- equity firm that owns BioMaxx.
DeltaPoint moved into the wood pellet business in July 2010 through the acquisition of PA Pellets, Choice Forest Products and two other related entities that it brought under the BioMaxx umbrella.
“It’s a green fuel that’s ready right now. It competes with fossil fuels,” Brodhead said. “The addition of Dry Creek gives us a well-established, highly respected brand name to add to our platform.”
DeltaPoint, which is one of a handful of private-equity firms across the state that participate in a program to invest state pension money in growing New York businesses, used $3.2 million in funds from the New York State Common Retirement Fund to help finance the acquisition and the headquarters move to Wellsville.
“BioMaxx is a perfect example of how we can do well for the members of the retirement system, while doing good for New York businesses and the environment,” State Comptroller Thomas P. DiNapoli said in a statement.
DeltaPoint plans to operate PA Pellets and Dry Creek separately. PA Pellets has the capacity to produce 40,000 tons of pellets per year, while Dry Creek’s capacity is 80,000 tons annually.
“That makes us one of the largest biomass wood pellet companies in the United States,” Brodhead said. “And we still have room to grow.”
The deal also will give Dry Creek better access to raw materials because PA Pellets has a proprietary way of preparing raw materials that makes it less dependent on residual material from the housing market, Brodhead said. PA Pellets also has an in-woods forestry operation that can take undesirable hard woods, such as discarded tree tops from lumbering and pole lumber, and turn it into pellets.
Dry Creek was founded in 1992 by Greg Palmer. “Our strategy is to invest in proven private companies that are changing hands,” said David Waterman, BioMaxx’s chairman and a managing director at DeltaPoint. “We are helping a well-established private company grow through a change of control transaction.”
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