- Acquisition Will Provide Greater HFC
Distribution, Significantly Enhance Customer Base; Strengthen
Overall Sales & Distribution Capabilities
- Investor Conference Call Today at 5
P.M.
Hudson Technologies, Inc. (NASDAQ:HDSN) (“Hudson”) today
announced that it has entered into a definitive agreement to
acquire Airgas-Refrigerants, Inc. (“ARI”), a subsidiary of Airgas,
Inc., a leading U.S. supplier of industrial gases, in a transaction
valued on a gross basis at approximately $220 million, subject to
closing and post-closing adjustments.
ARI is a leading refrigerant distributor and EPA certified
reclaimer in the U.S. ARI distributes, reclaims and packages
refrigerant gases for a variety of end uses.
Potential benefits of the acquisition include:
- ARI’s HFC distribution business will
favorably position Hudson as the industry shifts from
Hydrochlorofluorocarbons (HCFCs) to Hydrofluorocarbons (HFCs).
- Broader customer network will provide
Hudson with access to refrigerant for reclamation while also
strengthening distribution capabilities.
- Adding incremental reclamation
processing capacity to support the anticipated growth in
reclamation volume from the ongoing phase out of HCFC (R-22)
production and the future phase down of HFC production.
- Enabling Hudson to sell its
state-of-the-art Global Energy Services offerings to a broader base
of customers.
- Enhancing geographic footprint in the
U.S.
- Combining two highly complementary
businesses.
As of March 31, 2017, trailing 12 month pro forma revenue of the
combined business is approximately $250 million. The transaction is
expected to be accretive to earnings beginning one year following
the close of the transaction.
The acquisition will be financed with available cash balances
plus borrowings under an enhanced asset based lending facility of
$150 million from PNC Bank and a new term loan from funds advised
by FS Investments and sub-advised by GSO Capital Partners LP of
between $95 million and $110 million. No additional Hudson equity
will be issued to finance this transaction.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson
Technologies commented, “This will be a transformative acquisition
for our company, enhancing our business by providing a
complementary product portfolio, expanding our geographic footprint
and customer base and significantly expanding our sales and
distribution capabilities. ARI is a prominent refrigerant
distributor in the United States and we believe the combination of
our operations will provide meaningful scale to our business and
further enhance Hudson’s leadership in the refrigerant and
reclamation industry.
“The increased scale of the combined company will allow us to
better serve our customers during the ongoing phase out of HCFC
refrigerants and positions us better to serve an expanded customer
base during the future phase down of HFC refrigerants.
Additionally, this acquisition gives us access to a significantly
larger customer base and a new audience for our Global Energy
Services offerings, a growing focus of our business which provide
optimization solutions, engineering assessments and energy
management tools.”
Mr. Zugibe continued, “With the acquisition of ARI, we look
forward to leveraging our strengthened capabilities, expertise and
reach to meet the needs of an expanded customer base. We look
forward to serving our existing and acquired customers with our
expanded portfolio of products and services.”
The acquisition of ARI is subject to customary closing
conditions, including the consummation of the contemplated debt
financing, and the expiration or termination of the applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act, and is currently expected to close in 2017.
William Blair & Co. is acting as Hudson’s exclusive
financial advisor for the transaction and the law firm of Wiggin
and Dana LLP is serving as the Company’s legal counsel.
CONFERENCE CALL INFORMATION
The Company will host a conference call today, Wednesday, August
9, 2017 at 5:00 P.M. Eastern Time.
To access the live webcast and investor deck please use the
following link:
https://www.hudsontech.com/investor-relations/events-presentations/
To participate in the call by phone, dial (877) 407-9205
approximately five minutes prior to the scheduled start time.
International callers please dial (201) 689-8054.
A replay of the teleconference will be available until September
9, 2017 and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
conference ID: 19253
About Hudson Technologies
Hudson Technologies, Inc. is a leading provider of innovative
and sustainable solutions for optimizing performance and enhancing
reliability of commercial and industrial chiller plants and
refrigeration systems. Hudson's proprietary RefrigerantSide®
Services increase operating efficiency, provide energy and cost
savings, reduce greenhouse gas emissions and the plant’s carbon
footprint while enhancing system life and reliability of operations
at the same time. RefrigerantSide® Services can be performed at a
customer's site as an integral part of an effective scheduled
maintenance program or in response to emergencies. Hudson also
offers SMARTenergy OPS®, which is a cloud-based Managed Software as
a Service for continuous monitoring, Fault Detection and
Diagnostics and real-time optimization of chilled water plants. In
addition, the Company sells refrigerants and provides traditional
reclamation services for commercial and industrial air conditioning
and refrigeration uses. For further information on Hudson, please
visit the Company's web site at www.hudsontech.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
Statements contained herein which are not historical facts
constitute forward-looking statements. These include statements
regarding management’s intentions, plans, beliefs, expectations or
forecasts for the future including, without limitation, Hudson’s
expectations with respect to the benefits, costs and other
anticipated financial impacts of the proposed ARI transaction;
future financial and operating results of the company; the
company’s plans, objectives, expectations and intentions with
respect to future operations and services; approval of the proposed
transaction by governmental regulatory authorities; the
availability of financing; the satisfaction of the closing
conditions to the proposed transaction; and the timing of the
completion of the proposed transaction. Such forward-looking
statements involve a number of known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
factors include, but are not limited to, changes in the laws and
regulations affecting the industry, changes in the demand and price
for refrigerants (including unfavorable market conditions adversely
affecting the demand for, and the price of, refrigerants), the
Company's ability to source refrigerants, regulatory and economic
factors, seasonality, competition, litigation, the nature of
supplier or customer arrangements that become available to the
Company in the future, adverse weather conditions, possible
technological obsolescence of existing products and services,
possible reduction in the carrying value of long-lived assets,
estimates of the useful life of its assets, potential environmental
liability, customer concentration, the ability to obtain financing,
any delays or interruptions in bringing products and services to
market, the timely availability of any requisite permits and
authorizations from governmental entities and third parties as well
as factors relating to doing business outside the United States,
including changes in the laws, regulations, policies, and
political, financial and economic conditions, including inflation,
interest and currency exchange rates, of countries in which the
Company may seek to conduct business, the Company’s ability to
successfully integrate any assets it acquires from third parties
into its operations, and other risks detailed in the Company's 10-K
for the year ended December 31, 2016 and other subsequent filings
with the Securities and Exchange Commission. Examples of such risks
and uncertainties specific to the proposed ARI transaction include,
but are not limited to: the possibility that the proposed
transaction is delayed or does not close, including due to the
failure to receive required regulatory approvals or the failure of
other closing conditions; the possibility that the expected
benefits will not be realized, or will not be realized within the
expected time period; and the ability to complete the contemplated
debt financings. The words "believe", "expect", "anticipate",
"may", "plan", "should" and similar expressions identify
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date the statement was made.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170809005986/en/
Investor Relations:Institutional Marketing Services
(IMS)John Nesbett/Jennifer Belodeau(203)
972-9200jnesbett@institutionalms.comorHudson Technologies,
Inc.Brian F. Coleman, President & COO(845)
735-6000bcoleman@hudsontech.com
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