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Home My WebLink About2003 12 08 Informational 308 Florida Recycling 120803_COMM_Infonnational_Florida RecyclingPage 1 of2 COMMISSION AGENDA ITEM 308 Consent Information X Public Hearing Regular December 8. 2003 Meeting MGR. //J-- IDept. , REQUEST: City Manager advising the Commission of Capital Environmental Resources Inc.'s (CER) acquisition of Florida Recycling Services Inc (FRS). PURPOSE: This agenda item is needed to advise the Commission ofCER's acquisition of FRS through its subsidiary Waste Services, Inc. CONSIDERATIONS: On November 24,2003, CER confirmed rumors of its intentions to acquire FRS on or before January 31, 2004. Section "IX" of the City's Franchise Agreement with FRS states the following: "This agreement shall not be assignable by BFI (now FRS) without written consent of the City." FRS contends that Section "IX" does not apply to this situation. We are reviewing the terms of the acquisition to determine if Section "IX" does apply and will be providing you our recommendation for the January 12,2004 meeting. 120803_ COMM _Informational_Florida Recycling Page 2 of2 FUNDING: Not applicable RECOMMENDATIONS: Not applicable ATTACHMENTS: Attachment A: FRS memo of November 28,2003 Attachment B: CER Press Release of November 24,2003 COMMISSION ACTION: 2 !~/~~/L~~~ !b;L~ 'It:! (-.:IL1-'Il::ll::l ::ill) \/lHLEN JR. PAGE 02 . .. - . FLORIDA RECYCLING SERVICES, INC. "Recycle to benefit the environment" MEMORANDUM TO: Ronald W. McLemore, City Manager Allan Hill, Public Works Superintendent CITY OF WINTER SPRINGS FROM: DATE: RE: Sid Vihlen, Jr. November 25, 2003 Florida Recycling Services, Inc. Merger With Waste Services, Inc. a wholly owned subsidiary of Capital Environmental Resources. Inc. This is to inform you that we have had a very positive development at Florida Recycling Services. Inc. wherein we have entered into an agreement to merge our stock into a well funded and managed public company. The good news is that Florida Recycling Services, Inc. will retain its name and our management and personnel will remain in tact and we will be the same, ONLY BETTER.... Capital Environmental Resources, Inc. and its wholly owned subsidiary Waste Services, Inc. bring to Florida Recycling Services, Inc. tremendous financial capitalization and an excellent management organization that will improve our daily performance and make future growth possible with wonderful monetary and personnel resources available. The Ward Family, will become a major stockholder in Capital Environmental Resources, Inc., and Frank Ward, Sr., Frank Ward, Jr., George Ward and Robert Ward will have continued involvement in the company. Our senior managemen~ and staff will continue and, again, there will be no visible change other than our resources, as described, will greatly improve. While this relationship is in "CONTRACT FORM" we do expect a closing to occur as early as late January or shortly thereafter. We are informing you of this exciting development and of the fact that we, in ownership and management, look forward to a strengthened company that will be postured for outstanding performance and exceptional growth. While there is no consent required under our contact, we are informing you of this development as a matter of courtesy. Vihlen Jr, 1099 MILLER DRIVE. ALTAMONTE SPRINGS, FRIDA 32701 . (407) 837-1 Visit us on the we6 @ vvvvw.recyc/ingit.com o Mntad.,n ~e,<=!.d 'coer Thank you and if you have any ques . CAPITAL ENVIRONMENTAL RESOURce INC. PRESS RELEASE For Immediate Release CAPITAL ENVIRONMENTAL ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE FLORIDA RECYCLING SERVICES, INC. BURLINGTON, ON (November 24, 2003) - Capital Environmental Resource Inc. (Nasdaq: CERI) today announced that it, and its wholly owned subsidiary, Waste Services, Inc., have entered into a definitive agreement to acquire all of the issued shares of Florida Recycling Services, Inc. ("FRS") for a purchase price of approximately $128 million in cash and the issuance of approximately 3,250,000 common shares. FRS's operations are based in Central Florida, primarily servicing Orlando, Daytona, Fort Myers and Tampa areas. Its annual revenue for the year ended December 31, 2002, was approximately $85 million. FRS's operations consist of 8 collection companies servicing approximately 20,000 commercial and 320,000 residential customers, with approximately 342 vehicles. It also operates 2 transfer/processing facilities and has a third facility under development. When FRS is combined with Capital's existing Florida operations, and the assets to be acquired from Allied Waste Industries, Inc., Capital's Florida operations will consist of 13 collection companies, 4 landfills, 6 transfer/processing facilities and 4 recycling facilities with approximately 665 vehicles, servicing approximately 35,000 commercial and 550,000 residential customers. "The FRS acquisition, which complements the assets we are acquiring from Allied, will greatly enhance our presence in additional areas in Central Florida. Additionally, FRS's collection and transfer capabilities in the greater Orlando area will allow for significant internalization of waste volume into our Omni landfill, which is expected to open in January 2004," said David Sutherland-Yoest, Capital's Chairman and Chief Executive Officer. Completion of the acquisition, which is expected to occur on or before January 31, 2004, is subject to certain customary condition's. For information contact: Greg Fairbanks Executive Vice President - Strategic Planning and Investor Relations 480-281-1823 BROWN, S.ALZMAN, WEISS & GARG.ANESE, P.A. Attornry.r at Law Usher L. Brown · Suzanne D'AgrestaO Anthony A, Garganese" Gary S. Salzman' . John H. Ward · Jeffrey S. Weiss Offices in Odal1do, Ki~~immcc, (I1t:O~ & Viera Debra S. Babb-Nutchc:r Jeffrey p, Buak" John U, AIAdAnharn. Jr. Joseph E. Blilcl1 Douglas Lambert Kalherine Latorre Michelle A. Reddin Kimberly F. Whitfieltl --. 'Board Certified Civil Trial Lawyer .Board Celllfted Business Utlgatlon Lawyer ~Board Certified City. Counly& Local Government Law Erin J. O'Leary Of Counsel December 2, 2003 Via Facsimile and U.S. Mail Mr. Sid Vihlen, Jr. Florida Recycling Services. Inc. 1099 Miller Drive Altamonte Springs, Florida 32701 Re: Florida Recycling Services, Inc. Merger with Waste Services, Inc., a Wholly Owned Subsidiary of Capital Environmental Resources, Inc. Dear Mr. Vihlen: The undersigned is the City Attorney for the City of Winter Springs (.Citt). The City Manager of Winter Springs, Ronald W. McLemore, provided a copy of your November 24, 2003 memorandum to me for review and consideration. In your memorandum you advised the City that Florida Recycling Services, Inc. ("FRS") has entered into a relationship in "contract form" to merge its stock into Capital Environmental Resources, Inc. You also state that the City is not required to consent to the merger under the Franchise Agreement betWeen FRS and the City. Section IX of the Franchise Agreement states that, "This Agreement shall not be assignable by BFI [Florida Recycling Services, Inc.] without written consent of the City Commission." Based on the limited amount of information that you provided the City Manager, I am unable to advise the City as to whether the City Commission's consent will be required under the Franchise Agreement. In order for me to properly review this matter, I am requesting that you provide additional documentation, including, but not limited to, any Articles of Merger, Plans of Merger, and/or Sale and Purchase Agreement, that supports your position that the proposed merger between FRS and Waste Services, Inc., a wholly owned subSidiary of Capital Environmental Resources, Inc., will not, in effect, result in an assignment of the Franchise Agreement. 225 East Robillson Street, Suite 660 . P.O. Box 2873 . Orl::mdo. Florida 32802-2873 Orlando (407) 425-9566 Fax (407) 425-9596. Kissimmee (321) 402-0144. Cocoa &. Viera (866) 425-9566 Wobsite: www.or1andolaw.nel . Email: firm@orlandolaw.net Mr. Sid Vihlen,Jr. Florida Recycling SelVices, I no. December 2, 2003 Page 2 Although I understand the closing of the proposed merger will not likely occur until January 2004, the City is unable to determine whether the City Commission's consent is required to continue the effect of the Franchise Agreement until you provide the supporting documentation. If you are unable to provide the documentation until after closing, the City will make its determination after closing. I look forward to receiving the information from you in the very near future so that this issue can be expeditiously resolved by the City. Anthony A. Garganese City Attorney AAG :jf cc: Ronald W. McLemore, City Manager Mayor and City Commission