We were able to aggressively repay our debt because of our solid free cash flow. In 2011, we recorded $53.7 million of revenue, which generated adjusted EBITDA of $38.8 million. The cash-flow-to-revenue ratio from our energy recycling and highly efficient combined heat and power facilities was a robust 48 percent for the year.
Buying out the Manager's interest in Primary Energy Recycling Holdings
Subsequent to year end, we signed an agreement with Atlantic Power Corporation to purchase its common membership interests in Primary Energy Recycling Holdings LLC not currently held by the Company. The deal, which had not closed as of the writing of this letter, is expected to cost us approximately US$24 million plus a management termination fee of approximately US$6.1M for a total price of US$30.1M, subject to adjustment. This transaction would be accretive to shareholders in that each shareholder of Primary Energy will increase their ownership of the Company by 14.3 percent. Plus, this ownership was negotiated and purchased at a 16 percent discount to market. In addition, the transaction will provide the Company with operational autonomy and flexibility. As part of the transaction, our goal is to secure acceptable financing, which would include a refinancing of our current debt obligations.
Looking ahead—Staying Focused
While we are proud of our accomplishments in 2011, their true value will be reflected in 2012 and beyond.
Our long term goal is to be one of the most profitable, financially stable and capital efficient owners of energy recycling and combined heat and power facilities in
We are going to get there by staying focused on our goals, leveraging our deep experience in energy efficiency, and then making methodical and intelligent capital allocation decisions—slow and steady wins the race.
Through years of experience, we have gained a thorough understanding of what motivates our customers, and we have honed our unique technical and efficiency skills. By remaining focused, we have been able to wisely choose the right project investments, which have resulted in stable, long term supply contracts.
The combination of experience and focus is a formula we are committed to following in the future to achieve our long term objectives within a growing marketplace.
In 2011, we did an in-depth assessment of the market needs for recycled energy and combined heat and power opportunities. The market opportunity is immense and getting bigger due in part to low cost North American shale gas production, which is a natural fit for our business model.
According to the study we commissioned from a leading market research firm, the potential for new combined heat and power capacity at industrial and commercial facilities in the U.S. exceeds 120,000 megawatts. Waste heat to power, which we refer to as energy recycling, represents about 10,000 megawatts of additional potential.