Based on audited pro forma 2022 combined revenues of
Commenting on the proposed acquisition, Mr.
Strategic Deal Highlights:
The proposed acquisition is expected to yield several strategic and financial benefits, positioning the combined entity for further growth:
- SMGI and the target company would benefit from significant cross-selling opportunities, with the transaction providing a broader service mix to meet the needs of key customers.
- By integrating the target company's expertise in dry bulk and non-hazardous liquid freight shipping, the combined business would be able to scale and expand its service offerings.
- There is limited customer overlap and no significant customer concentration, as both SMGI and the target company bring unique customer relationships to the table.
- Anticipated cross-selling revenue synergies and cost savings, with projected annual cost savings of
$2.5 million resulting from the elimination of corporate and real estate cost redundancies. - The target company has an experienced management team committed to the success of the combined entity after closing.
- SMGI's public company structure would serve as an acquisition platform, providing access to liquidity for ongoing operations and future M&A transactions. Post-closing, SMGI intends to up-list to a national listing exchange to enhance access to the public capital markets and create a more attractive capital structure.
The letter of intent described above is non-binding, and as such, there can be no assurance that the Company will enter into a definitive acquisition agreement or that the proposed acquisition will be consummated.
For additional information regarding the proposed acquisition, please refer to the Company’s Current Report on Form 8-K filed on
Forward-Looking Statements
This press release contains certain "forward-looking statements" with respect to our financial condition, business strategies, growth opportunities, acquisitions, listing plans and objectives of management, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.
Forward-looking statements, including, without limitation, those relating to our future business prospects, listing plans, financial condition and acquisitions, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, among others, the risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended
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713-338-9415
Non-GAAP Financial Measures
In addition to certain traditional GAAP financial measures, we have presented in this press release “pro forma 2022 estimated Adjusted EBITDA” and “Target’s 2022 Adjusted EBITDA,” which are non-GAAP financial measures. These non-GAAP financial measures are being used by management and the Company’s board of directors to evaluate the anticipated benefits of the proposed acquisition of the target company. The non-GAAP financial measures should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP, and an analysis of non-GAAP financial measures should be used in conjunction with results presented in accordance with GAAP.
For SMGI and Target | ||||||
Target Acquisition Company | ||||||
Net Income | (11,610,240) | Net Income | 6,041,866 | |||
Plus: | Plus: | |||||
Depreciation & Amort | 5,328,366 | Depreciation & Amort | 4,385,250 | |||
Interest | 9,431,681 | Interest | 142,532 | |||
Tax | (130,043) | Tax | 34,337 | |||
EBITDA | 3,019,764 | EBITDA | 10,603,985 | |||
Adjustments to EBITDA | Adjustments to EBITDA | |||||
Non cash Stock based compensation | 61,043 | Subtract gain on sale of equipment | (549,198) | |||
Stock issued for debt extension | 643,467 | Accounting Consulting /Audit Fees | 4,950 | |||
200,161 | Discontinued Ops | 1,009,053 | ||||
Transaction M&A expenses | 36,641 | Legal Expenses | 26,082 | |||
CTO Services | 249,997 | Prosperio Consulting Fees | 13,500 | |||
Duplicative CFO costs | 109,521 | ERC Prep Fees | 266,011 | |||
Discontinued Ops / Legal | 22,074 | McLeod Upgrade/Bad Debt JWP | 31,573 | |||
Total Adjustments | 1,322,904 | Total Adjustments | 801,971 | |||
Adjusted EBITDA | $ 4,342,668 | Adjusted EBITDA | $ 11,405,956 |
Combined Total | ||
2022 Pro Forma EBITDA Calculation | ||
SMGI Adjusted EBITDA | 4,342,668 | |
Target Adjusted EBITDA | 11,405,956 | |
Estimated Cost Saving Synergies | 2,500,000 | |
2022 Total Pro forma Adjusted EBITDA | $ 18,248,624 |
Source:
2023 GlobeNewswire, Inc., source