Advanced Emissions Solutions, Inc. Announces 15-Year Activated Carbon Supply Agreement with Cabot Corporation
September 30 2020 - 5:00PM
Advanced Emissions Solutions, Inc. (NASDAQ: ADES) ("ADES"),
together with its subsidiary companies held by ADA Carbon
Solutions, LLC (collectively the “Company”), today announced it has
entered into a 15-year master supply agreement (the "Agreement")
with Cabot Norit America, Inc., a subsidiary of Cabot Corporation
("Cabot"), to supply Cabot with lignite activated carbon products,
including powder activated carbon ("PAC") and granular activated
carbon ("GAC").
"Today’s announcement is an important step
toward the creation of the Company’s post-Refined Coal future,"
said Greg Marken, Interim CEO of ADES. "The Agreement with Cabot
allows us to secure material incremental volume and better capture
the low-cost manufacturing capabilities of our Red River plant. It
also allows us to expand our product portfolio beyond our current
suite of products and capabilities, and provides entry into new and
diverse markets. The completion of this Agreement is a testament to
the premier quality of the activated carbon assets we possess, and
it serves as a high-quality example of promising opportunities we
have to grow our activated carbon business across a diverse set of
applications. We are very excited to partner with Cabot, a global
leader in specialty chemicals and performance materials, and look
forward to building an even stronger brand across the activated
carbon market."
"We have worked closely with ADES to demonstrate
production of the product portfolio necessary to accomplish this
deal and benefit from the improved manufacturing capabilities for
our respective companies," said Imtiaz Kathawalla, VP&GM,
Purification Solutions, Cabot Corporation. "We look forward to
continuing to provide our customers with the same high quality
products that they are accustomed to receiving from Cabot."
Agreement Summary:
The Agreement provides that the Company will
supply Cabot with activated carbon products, including PAC and GAC,
used for diverse end markets including the treatment of water, air,
food and beverages, pharmaceuticals and other liquids and gases.
The Company will supply all of Cabot’s lignite-based activated
carbon products in North America, subject to certain limitations.
Concurrently, the Company will take over Cabot’s lignite mine (the
“Mine”) that currently supplies Cabot’s Marshall, Texas facility.
The Company expects to immediately commence reclamation activities
related to this Mine, expecting that 70% of the reclamation costs
will be completed in the first 24 months, and Cabot will share in
the costs to complete these activities.
Marken continued, "This Agreement diversifies
our product portfolio and end markets with a global specialty
chemical leader, and also will bring a positive financial impact to
the Company as we more fully utilize our plants production
capabilities and cost structure. We expect our production to ramp
up incrementally during a 4-5 quarter transition period, which when
complete is expected to yield the following net impacts to our
current operations:
- Incremental
annual revenue growth of 30% - 40%;
- Incremental
annual EBITDA growth of $10 million to $15 million; and
- Diversified end
markets will reduce our power generation exposure to less than 50%
of product portfolio.
Marken concluded, "This announcement represents
the culmination of many quarters of hard work on both sides and
provides evidence of the strategic transactions we have been
forecasting since early 2020. Further, today’s Agreement is a
significant step forward and strong building block for our
platform, which will allow us to more fully realize the value of
our asset base and deliver long-term shareholder value."
About Advanced Emissions Solutions,
Inc.Advanced Emissions Solutions, Inc. serves as the
holding entity for a family of companies that provide emissions
solutions to customers in the power generation and other
industries.
ADA brings together ADA Carbon Solutions, LLC, a
leading provider of powder activated carbon ("PAC") and ADA-ES,
Inc., the providers of ADA® M-Prove™ Technology. We provide
products and services to control mercury and other contaminants at
coal-fired power generators and other industrial companies. Our
broad suite of complementary products control contaminants and help
our customers meet their compliance objectives consistently and
reliably.
CarbPure Technologies LLC, (“CarbPure”), formed in
2015 provides high-quality PAC and granular
activated carbon ideally suited for treatment of potable water and
wastewater. Our affiliate company, ADA Carbon Solutions, LLC
manufactures the products for CarbPure.
Tinuum Group, LLC (“Tinuum Group”) is a 42.5% owned
joint venture by ADA that provides patented Refined Coal (“RC”)
technologies to enhance combustion of and reduce emissions of NOx
and mercury from coal-fired power plants.
Caution on Forward-Looking
Statements
This press release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, which provides a “safe harbor” for such
statements in certain circumstances. The forward-looking statements
include estimated future incremental annual growth and increased
annual EBITDA, expected growth opportunities, financial impacts on
plant production capabilities and cost structure, and timing of the
production ramp up and reclamation activities. These
forward-looking statements involve risks and uncertainties. Actual
events or results could differ materially from those discussed in
the forward-looking statements as a result of various factors
including, but not limited to, future demand for products under the
Supply Agreement and our ability to fully capture the expected
low-cost capabilities of our manufacturing plant; as well as other
factors relating to our business, as described in our filings with
the SEC, with particular emphasis on the risk factor disclosures
contained in those filings. You are cautioned not to place undue
reliance on the forward-looking statements and to consult filings
we have made and will make with the SEC for additional discussion
concerning risks and uncertainties that may apply to our business
and the ownership of our securities. The forward-looking statements
speak only as to the date of this press release.
Source: Advanced Emissions Solutions, Inc.
Investor Contact:
Alpha IR GroupChris Hodges or Ryan
Coleman312-445-2870ADES@alpha-ir.com
Advanced Emissions Solut... (NASDAQ:ADES)
Historical Stock Chart
From Mar 2024 to Apr 2024
Advanced Emissions Solut... (NASDAQ:ADES)
Historical Stock Chart
From Apr 2023 to Apr 2024