Taronis Fuels, Inc. Announces the Closing of an $8 Million Acquisition of One of the Largest Independent Specialty Industrial Gas Distributors in the United States
May 27, 2020 at 09:00 am EDT
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Taronis Fuels, Inc. announced the closing of an $8 million acquisition of one of the largest independent specialty industrial gas distributors in the United States today. The target will be branded TGS, operating as a wholly-owned subsidiary of Taronis Fuels going forward. TGS’s operations cover the Georgia, Florida and Texas markets, with a dominant market share in the Atlanta, Orlando, Tampa, and Dallas metropolitan markets, and a strong market presence across much of Georgia, north and central Florida, and central and east Texas. TGS is a specialty gas supplier dedicated to the heating, ventilation and air conditioning (“HVAC”) market. The $8 million purchase was structured as $4 million in cash due at closing, and $4 million in multi-year seller debt financing. No equity was issued in conjunction with this transaction. The TGS acquisition has an immediate, significantly positive financial impact on the Company’s overall financial outlook. TGS generated $8 million in revenues in 2019 and is experiencing rapid growth due to the increased work-from-home policies implemented during the COVID-19 pandemic. So far in 2020, TGS has achieved a record March, record April, and is on pace for record monthly sales results in May. This acquisition brings in approximately $300,000 in added monthly EBITDA, which is projected to grow throughout the remainder of 2020. With this acquisition, Taronis is now able to generate positive EBITDA cash flows across its combined US operations. The Company is expected to periodically make discretionary investments in international business development, strategic manufacturing capabilities and research and development that may at times produce a short term period of negative EBITDA in order to accelerate growth opportunities and advance certain technology breakthroughs.
Taronis Fuels, Inc. is a renewable fuel and power generation company. The Company manufactures and distributes industrial, medical, specialty and beverage gases and associated welding and safety supplies through its subsidiary, MagneGas Welding Supply. The Company operates over 15 retail locations and two gas fill plants. The Companyâs gas fill plants create industrial, medical, specialty and beverage gas products that are distributed to its wholesale and retail customers. The Company also supplies its customers with products ranging from bulk quantities of cryogenic gases to individual packaged gas cylinders. The Company has a diversified customer base in both the wholesale and retail markets. The Company has the expertise, assets and sources of supply necessary to service large, bulk cryogenic gas customers as well as small one-man businesses.
Taronis Fuels, Inc. Announces the Closing of an $8 Million Acquisition of One of the Largest Independent Specialty Industrial Gas Distributors in the United States