DiNapoli: NYS Pension Fund Invests $3.2 Million in Biomaxx Wood Pellet Company
The New York State Common Retirement Fund (the Fund) invested $3.2 million in BioMaxx Inc., through DeltaPoint Capital Management, LLC, State Comptroller Thomas P. DiNapoli announced today. The investment allowed BioMaxx to acquire Wyoming County-based Dry Creek Products, Inc. and to establish its company headquarters in Allegany County.
“BioMaxx is a perfect example of how we can do well for the members of the Retirement System while doing good for New York businesses and the environment,” DiNapoli said. “Biomass applications create clean and renewable energy that reduces our dependence on foreign oil. This is a great investment for the pension fund, and a good step toward making New York and the country less dependent on fossil fuels.”
BioMaxx used the $3.2 million in capital to acquire Arcade, NY-based Dry Creek Products, a manufacturer of premium-grade hardwood pellets, and to establish headquarters in Wellsville, NY, which is located between the Arcade, NY facility and another BioMaxx facility in Pennsylvania. The move of BioMaxx’s headquarters brings 10 jobs to Wellsville. The capital was invested through the Fund’s In-state Private Equity Program.
“With the Common Retirement Fund, DeltaPoint’s strategy is to invest in well-established private companies that are changing hands,” said David Waterman, managing director at DeltaPoint and BioMaxx’s chairman of the board. “That strategy manifests itself in the BioMaxx investment, as we are helping a private company grow through a change of control transaction. We expect BioMaxx to grow significantly through further acquisition, strategic partnerships and organic growth initiatives.”
“The Dry Creek acquisition helps further establish BioMaxx as a leader in one of the only true clean-tech industries,” said George F.T. Yancey, BioMaxx’s president and an operating director of DeltaPoint. “We are producing a product that is environmentally friendly and competes directly with fossil fuels. This is not a product in development; wood pellets compete with fossil fuels right now.”
The hardwood pellets are used by residential users as a source of heat in wood pellet stoves. A typical user consumes two to three tons of pellets each heating season. Historically, wood pellets have resulted in significant savings over more conventional fuel sources. BioMaxx also manufactures biomass-based absorption products, paper-quality wood chips, railroad ties and lumber.
Through the In-state Private Equity Program, the Fund invests with private equity managers who seek to invest in companies in New York state that require capital for growth. In addition to delivering returns consistent with the Fund’s private equity portfolio, the program also attracts capital from other investors and helps stimulate job growth in New York.
Since 2000, $524 million has been invested in 173 companies through the In-state Private Equity Program. The Fund has achieved a 30 percent rate of return on the investments it has exited. DiNapoli added $518 million to the program since he took office in 2007, bringing the total amount committed to the program to $971 million. The Fund has approximately $446 million available to invest in New York-based companies.
About the Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension plan in the United States with more than one million members, retirees and beneficiaries from state and local governments. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.
About DeltaPoint Capital
DeltaPoint Capital Management, LLC is a Rochester, NY-based private equity fund manager that makes lead-sponsored investments in companies with proven cash flows and strong management teams and that are principally located in the Northeastern United States. The firm has recently held initial close on its fourth private equity fund and is actively sourcing investment opportunities. Fund IV employs a growth-oriented approach to small cap buyout opportunities in underserved markets throughout the Northeast. The fund seeks niche market leaders that are capable of significant growth. DeltaPoint identifies and implements changes necessary to accelerate this growth and achieve excellent returns.