Attis Industries (NASDAQ: ATIS) is having yet another strong day in the market today, following up on the gains that we saw throughout last week. The gains today are the result of new information released by the company about the Sunoco facility acquisition that Sunoco announced on Friday. Today, we’ll talk about:
- The news;
- what we’re seeing from ATIS stock as a result; and
- what we’ll be watching for ahead.
ATIS Announces Further Details About Sunoco Facility Acquisition
As mentioned above, Attis Industries is having yet another strong day in the market today after the company announced further details about an asset purchase agreement with Sunoco.
Under the terms of the agreement, the company will acquire and operate Sunoco’s corn ethanol plant and grain malting operation in Fulton, NY. In the release, ATIS said that the plant will become the essential element of its expanding technology portfolio. In fact, the company intends on developing the site into the most comprehensive Green Tech campus for renewable fuels in the United States.
As far as the finances go, the company said that it has agreed to a $20 million asset price to be paid in cash. It is expected that the transaction will be financed through non-dilutive sources of funding. Of course, the transaction is subject to regulatory approval as well as customary closing conditions.
The acquisition is a match made in heaven as the company has a long-standing relationship with Sunoco and the team at the ethanol facility that the company has agreed to purchase. Moreover, the companies have also entered into a 10-year offtake agreement. Under this agreement, Sunoco will purchase the ethanol produced in the facility.
In a statement, Jeff Cosman, CEO at ATIS, had the following to offer:
The acquisition of Sunoco’s Fulton, NY ethanol plant is a significant step in Attis establishing a foothold in the renewable fuel space, while accessing the fourth largest gasoline market in the United States. Attis’ familiarity with the facility as well as the progressive business environment in the state of New York provide us with a unique opportunity to transform an asset with incredible potential into an innovative campus for bio-based fuel that is consistent with our short and long-term growth strategy.”
We believe the demand for low carbon energy sources will continue to increase in the coming years and Attis is well positioned to be able to grow with that trend. The Fulton ethanol facility generates significant revenue for our growing company, it greatly changes the perspective of our investors in Attis and enables Attis to roll-out additional technology platforms under the Innovations division to expand our revenue and cashflow projections over the next two years. Having an established asset like the Fulton, NY ethanol plant on the books allows us greater access to financing opportunities, as well as provides us with a shovel ready site to begin the development and commercialization of some of our previously announced technologies.
It is also worth mentioning that the 1886 Malt House has been included in the acquisition. This malt house is a direct beneficiary of incentives that were designed to promote the local farm to brewery industry in New York. In fact, the company will enjoy some tax-exempt status as a result of New York’s initiative.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Attis Industries, the news proved to be overwhelmingly positive. After all, the acquisition is a highly accretive one, and one that, due to the 10-year offtake agreement, will largely pay for itself. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:39), ATIS is trading at $0.29 per share after a gain of $0.01 per share or 3.57% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ATIS. In particular, we’re interested in following the story surrounding the company’s continued work to become a driving force in the renewable energy space, a space that due to the company’s IP, it has the possibility of becoming a cornerstone within. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!