Charlotte-based Swisher Hygiene, which is undergoing an internal financial review, said Friday it has sold its Choice Environmental Services solid waste disposal unit for just over $123 million in cash.
The move will allow Swisher to pay off its Wells Fargo credit facility of $17.2 million, with much of the rest of the money helping Swisher fund its core hygiene service and chemical operations. Swisher’s stock closed at $1.43 a share on Friday, up 28 cents. The shares surged more than 24 percent after news of the sale.
“We have been pleased with the operations of our Choice subsidiary over the past year and a half and we will miss having the Choice team as a part of the Swisher Hygiene family,” said interim Swisher Chief Executive Officer Thomas Byrne, in a statement.
Swisher also said senior vice president Hugh Cooper has left the company, effective Nov. 9. Under his separation agreement, Swisher will pay Cooper $225,000, as well as reimbursing him $1,120 per month for health insurance for a year. The company did not say why Cooper left.
Swisher acquired Choice Environmental Services in February 2011. The company paid $5.7 million in cash for Florida-based Choice, along with $48.8 million worth of stock and $42.8 million worth of assumed debt, most of which was paid off quickly with more stock.
At the time, executives said the acquisition would allow Swisher, which started by providing restroom cleaning services, to become a full-service waste disposal company. But Friday, Byrne said Swisher had determined it could provide waste disposal services in a “less capital-intensive, more cost-effective” way by instead partnering with other companies.
The company that purchased Choice from Swisher, Progressive Waste Solutions, owns waste disposal companies throughout the U.S. and Canada. Progressive executives said Choice is a good fit for its business model. Choice, founded in 2004, has annual revenues of approximately $72 million, Progressive Waste said in a statement. Choice also has 320 employees and 150 waste collection vehicles.
“We are very pleased to add these assets, which strongly complement our existing collection and disposal footprint in Florida, to our growing network,” said Joseph Quarin, Progressive Waste’s CEO.
This has been a turbulent year for Swisher. In March, the company disclosed it was investigating misstated financial results and investors should not rely on financial statements from 2011. The review likely will cause Swisher to state losses that are millions of dollars higher than previously disclosed. The company’s CEO and two chief financial officers have since left Swisher.
Swisher also is facing a lawsuit from shareholders, who allege that the company inflated its stock price with misleading financial statements.
Former CEO Steve Berrard, still a major shareholder, was brought back last month under a consulting agreement worth up to $1 million to help defend the company in legal matters and close “certain transaction activity.”