General Environmental Management, Inc. (GEVI.OB) Moves Forward With Sales and Acquisitions

 @ibtimes on December 23 2009 9:47 AM

General Environmental Management Inc. recently completed the acquisition of Santa Clara Waste Water (SCWW), a profitable full-service environmental services company focusing on waste water treatment. SCWW has been doing business for over 50 years, and has treated more than 2 billion gallons of waste water. It’s listed as one of the top 100 privately owned non-hazardous waste water utilities in the country.

The acquisition was financed through the issuance of six promissory notes, totaling $9,003,000, along with warrants for the principals of SCWW to purchase 425,000 shares of GEM common stock. The interest rate for the notes is 6½% per annum. Two of the notes, totaling $3,778,000, are convertible into a total of 15% of GEM’s common stock on a fully diluted basis.

The acquisition is seen as one of several major actions taken by General Environmental Management (GEM) to improve the company’s balance sheet and focus on new and more profitable markets, including the sale of GEM Mobile Treatment Services and the execution of an agreement to sell the field services business unit.

GEM CEO, Tim Koziol, commented earlier on the moves, “Taken together, these strategic moves have created a foundation for GEM to take advantage of opportunities that we believe will lead to profitability and positive cash flow in the coming year. Our shareholders should look at the current quarterly report as a reflection of a work in progress. Our intention is to continue to focus on higher margin business opportunities in the water treatment and waste-to-energy markets in order to maximize shareholder value of our company’s stock. We are very pleased with the progress and advancements the company has made the past few months, especially when considering the difficult economic environment.”

Koziol added, “Concluding the sale of our field services business will result in a dramatic improvement of our balance sheet, and will result in a lean business that will put profitability and cash generation as the top priorities. We firmly believe our hard work will pay off once we’ve fully transitioned to the faster-growing water treatment and waste-to-energy markets. After the foundation is laid, we will focus our efforts on building a regional and then national presence.”

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