Biomass holding company expands pellet capacity

By Lisa Gibson | February 15, 2011

Under the umbrella of new holding company Biomaxx Inc., Rochester, N.Y.-based private equity firm DeltaPoint Capital Management LLC has tripled its capacity for wood pellet production with its most recent acquisition. Recognizing an industry primed for growth, the company plans to buy up more wood pellet plants, concentrating mainly on the Northeast.

The purchase of Dry Creek Products adds four more plants to the Biomaxx profile, according to Jason Hall, senior associate with DeltaPoint. Added to the two plants acquired in its purchase of PA Pellets, Biomaxx now has a capacity of between 100,000 and 120,000 tons of pellets per year, Hall said. “I think theoretically, we could produce more, but we’re focusing on that capacity,” he said, adding that the company will sell its pellets domestically.

“The formation of this holding company represents DeltaPoint’s commitment to an aggressive acquisition strategy within the growing global wood pellet industry,” said DeltaPoint managing director David Waterman, who will also serve on Biomaxx’s board of directors. “We intend to take advantage of integrated production processes found at PA Pellets to maximize its capabilities and capacity, and more importantly to create a template for growth by acquisition. Consolidation, supply chain management and waste reduction are not new business techniques, but our approach to the application of these techniques may be new to the wood pellet industry. We are excited on many levels.”

DeltaPoint’s recapitalization of the company is the first step in a unique platform for substantial acquisition and consolidation in the wood pellet industry, according to Jason Holmberg, executive vice president of Biomaxx. “DeltaPoint’s operational expertise and access to significant capital will allow us to become a fully integrated biomass management company across the Northeast and to become an even more reliable supplier to our loyal and growing customer base,” he said.

Besides its pellet operations, the holding company also owns Choice Forest Products and two other related entities, according to DeltaPoint.