Company Overview
Freedom Environmental Services Inc. (FESI) provides standards management services for municipal, industrial and commercial wastewater and storm-water system customers across central Florida. The Company provides operating and maintenance services for water treatment plants and sewage pumping stations; organics collection and disposition; and commercial plumbing and water system management.
In addition, FESI offers programs that protect homeowners and residential building owners from environmental disasters by ensuring that their systems are in good working order and by anticipating and fixing problems before they occur. The Company’s Neighbors Protecting NeighborsTM program is a pre-paid residential protection plan for personal, communal and multi-family septic systems. FESI provides its customers with emergency, diagnostic, management and system maintenance services seven days a week, 24 hours a day.
FESI has executed a letter of intent to purchase the central Florida market leader in waste processing and infrastructure reconstruction. The company it plans to acquire has been in business for three generations and currently generates $10 million in annual revenues. In addition, the business is well positioned to grow exponentially because of a recent 300% increase in permitted grease and waste processing capacity to 450,000 gallons per day. The acquisition should close late in the fourth quarter of 2008.
FESI also plans to develop applications for wastewater and waste by-products by building commercial plants to convert these feedstocks into biofuels and fertilizers. The Company’s goal is to produce 20 million to 30 million gallons of biofuel in 2009. FESI has developed a “Vertical Collection and Service” model that focuses on collecting wastewater products from commercial and residential customers and utilizing these substances to produce biofuels. In late September 2008, FESI formed a joint venture with a biofuel company with 30 million gallons per year of processing capacity. The joint venture will also include a wholly owned grease collection operation that currently has more than 1,200 active grease customer accounts and can provide the feedstock for fuel production. In addition, FESI has secured contracts for liquid waste collection with McDonald’s franchisees located in the Orlando (central Florida) area, an important first step in establishing a reliable feedstock platform for biofuel production.
Investment Highlights
Strong outlook for wastewater treatment equipment market
The population of the U.S. is estimated to reach 420 million by mid-2050. This growth will put enormous strain on existing water resources and strengthen demand for water recycling and reuse systems. There are more than 50,000 community water systems and more than 16,000 wastewater systems in the U.S. Equipment that was installed following the Clean Water Act in 1972 is coming to the end of its useful lifecycle and there is an urgent need to upgrade and retrofit wastewater treatment equipment. Sales opportunities abound for manufacturers who can provide energy-efficient, reduced-footprint equipment upgrades that, not only replace non-functional or older equipment, but also bring the end-user into compliance with stricter regulations governing wastewater treatment.
The U.S. EPA estimates $202.5 billion in spending will be needed to control wastewater pollution for up to a 20-year period. This amount includes $134.4 billion for wastewater treatment and collection systems, $54.8 billion for combined sewer overflow corrections, and $9.0 billion for storm-water management. Small communities have documented needs of approximately $17.0 billion.
Growth through acquisitions in the wastewater treatment market
FESI plans to establish a series of organic collection system platforms within regional and super-regional metropolitan areas by acquiring market leading operators. Utilizing this business model, FESI will build facilities in the Southeast and nationwide that can produce high grade fuel and bio-organic nutrient products from commercial, industrial and residential waste feedstock. The plan is to collect raw waste (grease and septage) from customers, which will provide the raw material for biofuel, transport the raw materials to a Company processing facility where waste convertible into biofuel would be separated from unusable waste, and convert the feedstock into biofuel.
Integrating waste-to-energy operations will provide cost advantages
In September 2008, FESI announced plans to acquire a biofuel producer with operations in Florida and Pennsylvania. The current combined capacity of its processing plants is 30 million gallons per year. With fuel prices at current levels, revenues from fuel production at the acquired plants could approach $100 million annually.
This transaction will also give FESI an integrated production platform from raw materials collection through the manufacture of market-ready fuel. Developing this integrated platform and building an consistent, reliable grease feedstock supply will provide FESI with a pricing advantage over other biofuel producers.
Acquisition adds $10 million to annual revenues
In October 2008, FESI executed a letter of intent to acquire the central Florida market leader in waste processing and infrastructure reconstruction. The acquisition, expected to close in the fourth quarter of 2008, will provide FESI with $10 million in additional revenues for 2009 and processing capacity of 450,000 gallons per day. This acquisition will also give FESI a market leading grease collection platform to feed biofuel production in excess of 20 million gallons per year.
Neighbors protecting NeighborsTM program for central Florida market
The Company has developed an innovative Neighbors protecting NeighborsTM pre-paid residential protection program that monitors and maintains personal, communal and multi-family septic systems. The program helps prevent the spread of disease in communities and protects water resources by effectively removing nitrogen, phosphorus, and disease-causing bacteria, viruses and other typical pollutants from the water supply. The program will be offered through consumer and commercial direct sales channels at prices ranging from $795 to $1,695 for two- or three-year coverage. Financing may also be made available. FESI anticipates signing 2.5% of the 1.5 million households in the Orlando-Tampa market to this program.
Business Model
The Company has developed a two-pronged business model focusing on both wastewater treatment and biofuel production from waste by-products.
FESI provides turnkey system management services for commercial, industrial and municipal, wastewater, storm-water and water systems across central Florida. The Company’s water and wastewater treatment services include planning, evaluation, design, construction, inspection, operation and troubleshooting for a complete range of industrial and municipal wastewater treatment requirements. It brings sub-par systems into compliance with industrial effluent discharge standards. FESI also offers grease and organics collection and disposition, commercial plumbing, sewer and drain systems construction and lift station installation. The Company recently executed a letter of intent to acquire a $10 million in sales waste processing and environmental services company in Florida.
FESI also offers Neighbors protecting NeighborsTM, a pre-paid residential protection program for monitoring and maintaining personal, communal and multi-family septic systems. The program helps communities halt the spread of disease and protects water resources by effectively removing typical pollutants such as nitrogen, phosphorus, and disease-causing bacteria and viruses from the system. Another key reason for regular septic system maintenance is to save money by avoiding expensive repairs or replacement of systems. The program will be offered through consumer and commercial direct sales channels at prices ranging from $795 to $1,695 for two or three years of coverage. FESI’s goal is to cover 2.5% of the 1.5 million households in the Orlando-Tampa region through this program.
The second part of the Company`s business model is under development and involves establishing wastewater treatment/ biofuel facilities that will produce fuels and natural bio-organic products (such as fertilizer) from waste by-products. FESI is developing a process for treating and harvesting nutrients such as phosphorus and ammonia from city wastewater treatment plants. The system filters out the wastewater and treats and bakes the sludge so the final product will be crumbly, dry fertilizer that can be bagged and sold to gardeners.
FESI plans to establish a series of organic collection systems within regional and super-regional metropolitan areas by acquiring market leading operators as platforms. The Company then plans to build regional facilities in the Southeast and nationwide that will produce high grade fuel and bio-organic nutrient products from commercial, industrial and residential waste feedstocks. This business will involve:
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Collecting raw waste (grease and septage) from customers which would constitute the raw material of biofuel;
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Transporting the raw materials to a processing facility controlled by the enterprise where waste convertible into biofuel would be separated from unusable waste; and
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Converting the feedstock into biofuel.
As a first step toward its goal, the Company plans to acquire a biofuel producer with operations in Florida and Pennsylvania. The current combined capacity of its processing plants is 30 million gallons per year. Additionally, the venture will include a wholly owned grease collection operation that currently has in excess of 1,200 active grease customer accounts, providing the critical raw material for fuel production and enabling FESI to immediately expand grease collection service sales efforts.
Waste to Energy
Yielding Bio-Energy from Waste
FES is committed to development and production of fuels and natural bio-organic products derived from waste and by-products. Freedom will rapidly develop Vertical Organic Collection Systems within regional and super-regional metropolitan areas by acquiring market leading operators as platforms and will use this business model in building regional facilities in the southeast and nationwide.
Delivering Products that are Relevant
Biofuels are produced from living organisms or from organic or food waste products and meet, or exceed, rigorous EPA Clean Air Act standards. Because it is derived from renewable resources, biodiesel is an environmentally-conscious fuel choice, is a clean-burning alternative fuel and significantly reduces harmful emissions associated with global warming, while enhancing lubricity of conventional diesel fuel.
Converting excess Bio-Organics and Bio-Solids to Fertilizer
Processed waste bi-products and bio-organic solids produce cost effective fertilizer products for the commercial market. Regulatory and public pressures on bio-solids programs have increased diversification and use options in recent years. Heat drying and pellet production are perfect choices for bio-solids producers ready to develop secure, long-term outlets for their bio-solids.
FES intends to process excess waste bio-solids from its Vertical Organic Collection Systems into environmentally acceptable fertilizers for the commercial and export markets.
Recent FESI News:
October 31 -
Freedom Environmental Services, Inc. (FESI) Executes Letter of Intent to Purchase 30 Million Gallon Biofuel Producer with Full Production Revenues Estimated at $120 Million Annually
Freedom Environmental Services, Inc. (Pink Sheets:FESI) announced the execution of a letter of intent to purchase a leading biofuel producer having operations in Florida and Pennsylvania.
The acquisition target has a fuel production capacity of 30 million gallons per year and controls 1,200+ proprietary grease collection accounts, used as low cost feedstock for fuel production. Biofuel production revenues from both locations, at full production, will approach $120 million annually.
Michael S. Borish, Chairman and Chief Executive Officer of FESI, was quoted as saying: “Upon completing this transaction, at pricing substantially under replacement cost, FESI will enjoy significant cost advantages in fuel production costs as well as speed to market efficiencies. The target company has already gone through all the challenges facing a start up with new technology and is now producing high quality fuel for the diesel market. Additionally, through the ramp up process the company has grown its grease collection platform to 1200+ accounts, providing a dependable, low cost feedstock supply for fuel production. The grease collection company is currently profitable as an independent operation. FESI had previously announced its intention to acquire this producer, and the execution of this letter of intent is a major step forward to completing the proposed transaction.”
FESI is developing a pricing advantage over other waste collection companies that do not have as profitable an outlet for their organic grease due to the unique ability to maintain a continuous in-house supply of feedstock. Typical pre-tax, pre-incentive profits approach $1 per gallon in the production of Biofuel. Pennsylvania has been a leader in incenting the production of alternative fuel sources and identifying assets in that state has been a priority for FESI.
Freedom Environmental Services, Inc. is an operating wastewater services company servicing commercial, institutional and municipal infrastructure customers and wastewater system protection programs. The Company is developing and managing high yield liquid waste to Biofuel and nutrients conversion programs driven by strategic acquisitions and its commercial customer base. Freedom Environmental Services, Inc.'s website is: www.freedomservicesflorida.com.
Freedom Environmental Services
7395 Hoffner Avenue
Orlando, Florida 32822
407-658-6100 office
407-658-6002 fax
http://freedomservicesflorida.com/
