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Sevenson Environmental Services stock has stopped trading after the Niagara Falls hazardous waste cleanup firm moved to deregister its shares as a precursor to taking the company private.

With Sevenson's stock failing to trade at all on most days and with an average of less than 650 shares changing hands per day over the last year, executives said it no longer is in the company's interests to have to comply with the rules and added expenses associated with having its shares registered to trade on a major stock market, like the Nasdaq.

Sevenson, which hired First Albany Corp. last May to look for ways to enhance shareholder value, is expected to be taken private by the company's current management and majority shareholders, led by various members of the Elia family.

"The management and the Elia family is going to maintain control of the company," said William McDermott, Sevenson's vice president of finance. "That's our wish and, as a practical matter, it's the only viable option."

McDermott said no offer has been submitted to a special committee made up of two independent directors, former Pratt & Lambert United chief executive Joseph J. Castiglia and retired Calspan chief executive Robert S. Kelso, that has been charged with evaluating any offer to determine if it is in the best interests of shareholders who are not part of the Elia family or top management.

The Elia family and other top managers own a controlling interest in the company through a separate class of stock that has greater voting rights than the shares that are owned by the public.

Michael A. Elia, the company's president and chief executive officer, said management hopes to develop a plan by the end of March that would allow Sevenson's shareholders to realize the fair value of their investment.

Sevenson, which went public in April 1989 at a split-adjusted price of $10.31 per share and saw its stock peak at $15.78 three months later, has struggled since then as investors lost interest in the environmental services industry. Periods of cut-throat competition and erratic funding levels for federal and private cleanup jobs also have contributed to the industry's ups and downs over the last decade.

As a result, Sevenson's stock has returned an average of about 2 percent a year for its investors since the company went public, compared with an average annual return of about 12 percent for the S&P 500 index.

Elia said he was disappointed by the market for Sevenson's stock, which has lagged despite record profits last year. Sevenson's profits fell 13 percent during the first half of this year as the company completed work on some of its more lucrative projects.

Sevenson now has fewer than 300 shareholders, which is the threshold that allows a company to deregister its shares, down from 800 to 900 at its peak. "We never caught on with individuals and, as time went by, we've had fewer and fewer shareholders," McDermott said.

The stock, which closed at $13.10 when it last traded on Thursday, also rarely changes hands. Sevenson's stock traded during only 15 of the last 45 trading days before trading was halted in the wake of the company's decision to deregister its shares.

"There isn't a heck of a lot of trading, so the question becomes, are you really a publicly traded company at all," said McDermott, who estimated that it costs the company about $200,000 a year to meet all the requirements of a public company.

Sevenson, which had $126 million in sales last year, has about 475 employees, including about 200 in Western New York, McDermott said.


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