Wednesday, September 09, 2009

B.H.I.T., Inc., acquires The Wood Energy Group

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B.H.I.T., Inc., a publicly traded railroad support services company headquartered in Boca Raton, Fla., has acquired 100 percent of the equity securities of The Wood Energy Group, Inc. for $6.4 million, plus customary closing adjustments.

Wood Energy, headquartered in St. Louis, Mo., is one of the nation's largest railroad tie reclamation/energy generation companies. Founded in 2001, the company reclaims railroad ties for Class 1, regional and short line railroads and then disposes of the ties to either the energy co-generation or landscape markets. In addition, the company processes wood products for forest products companies for additional sources of biomass fuel.

Wood Energy has principal contracts with Union Pacific and Canadian National, as well as contracts with International Paper, Mead Westvaco) and others. The company currently serves customers located in the southwest and southeast U.S., and has future plans to expand its service area. In 2008, Wood Energy reclaimed approximately 900,000 railroad ties and generated revenues of more than $5.2 million.

Wood Energy, managed by Greg Smith, president, and Andy Lewis, vice president, currently has 25 full-time employees. Smith has been in the railroad tie reclamation business since 1991, and has developed a patented design for the disposal of used ties. Future plans call for the company to invest in additional tie grinding equipment in order to further meet the needs of the co-generation market. Shredded railroad ties are a viable "green" source of biomass fuel for industrial plants and utilities.

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