Case Study - Knowaste

THE CHALLENGE

This US owned and Toronto based company had developed new technology to recycle hospital waste and personal care products (primarily diapers). Knowaste was operating a pilot plant in Mississauga, Ontario, but was cash flow negative and dependent on investors for survival. The company wanted to develop the process commercially and to expand internationally where tipping fees were high enough to support the business. The challenge was to find an appropriate location, set up the operation and restructure the existing corporation while raising the necessary capital for expansion. Knowaste needed new management and partners willing to share in the ownership and risk.

THE METHOD

Knowaste hired Devonshire Holdings, Inc. and appointed Mr. Nolan as President and CEO responsible for the firm’s refinancing and restructuring. Mr. Nolan set out to restructure management and to refinance Knowaste’s debt. With the assistance of Hendrik J. Laverge, he was able to obtain the confidence and support of the Dutch government, including a government guarantee of the long term financing. Mr. Nolan hired a new management team in The Netherlands to further develop the technology and to design and build a new waste processing facility. Management then developed and implemented the new Marketing and Logistics plan to make the Dutch plant fully operational and self-sufficient for the future.

Devonshire, acting on behalf of Knowaste, was able to obtain construction financing through De Nationale Investeringsbank NV (“NIB”), and a commercial loan with the Banque Artesia. Devonshire Holdings secured Dutch equity investors and arranged the guarantee from the government of The Netherlands for the long-term financing. With the assistance of Peter Gründling, Mr. Nolan expanded the marketing effort into Germany, opening the first office in Dusseldorf.

THE RESULT

Having secured equity and debt of US $29MM plus the Dutch government guarantee through the efforts of Devonshire Holdings, Knowaste, BV, became a fully operational recycling enterprise in both the Netherlands and Germany. With its new management and marketing team, it has expanded in Canada, the United Kingdom and Europe.