PHI Group, a U.S. public company focused on conventional energy and renewables, announced today that the Company has signed a Letter of Intent to acquire a wood pellet manufacturing company in Southeastern United States.
The identity of the target company and certain details will be kept confidential until closing. The total purchase price for 100% of the operation, excluding liabilities and cash and cash equivalents, is approximately $9 million dollars. The transaction is subject to entering into a definitive purchase and sale agreement, customary conditions, due diligence and financing commitments.
The 36,000 square-foot manufacturing plant and storage facility, located on 18 acres, were constructed in 2009 and went into production in 2010. Annual production was approximately 100,000 MT/year. Revenues were $19.2 million and $12.4 million for FY's 2014 and 2015, respectively.
The Company expects to sign the definitive purchase and sale agreement in the next two weeks and will continue to complete due diligence and secure the required purchase and operating capital in order to close the transaction.
PHI Group is investigating options for production and sales and marketing, including adding new product lines following the closing.
Henry Fahman, CEO of PHI Group, said, "We believe we could increase revenue level to between $37 million to $44 million per year if our strategies are successful. We feel confident that a closing of the acquisition of either this wood pellet plant or the Vietnam-based Pacific Petro LPG company will qualify PHI Group for uplisting to the Nasdaq Stock Market."
Source: PHI GROUP, INC.
Date: Jun 16, 2016