Redishred Capital acquires Proshred Atlanta from its franchisee

Redishred Capital Corp., Mississauga, Ontario, has completed the acquisition of the Proshred Atlanta business from its franchisee located in Atlanta. The acquisition was effective at the end of the day July 30. The location earned about $1.3 million in revenue during the 2020 fiscal year and currently operates five trucks in the Atlanta market.

The acquisition includes on-site paper and hard drive shredding trucks, containers, client relationships and other assets used in the shredding business. Redishred says the Atlanta market has the size, scope and growth profile for this to be an “attractive market” moving forward as the area has a population of more than 6 million people and its population has grown by 15 percent in the last decade.

According to a news release from Redishred, the company views this acquisition as accretive to its cash flows and earnings on a per share basis. The company financed this acquisition through cash reserves and from accessing CA$854,000 from its acquisition loan facility.

Redishred reports that the purchase price of the acquisition has a target payout of between $2 million and $2.9 million based on the performance of the operation over the following three years from the closing date. Cash consideration was $2 million. The remaining consideration was in the form of earnout provisions tied to attainment of financial metrics.