FormerXBC Inc XEBEQ

Xbc news of acquisition

[tinkvid]

https://www.stockwatch.com/News/Item/U-z8386176-U!XEBEF-20211103/U/XEBEF

[Kronyboy]

Key Transaction Highlights Acquisition of Denver area based UECompression (“UEC”) to expand North American production capacity five-fold for a total of 150 to 190 containerized BGX Biostream™ (“Biostream) and Hy.GEN® hydrogen units per year to meet accelerating U.S. demand for standardized renewable gas systems Further optimizes global manufacturing footprint by bringing Xebec’s

[sjc444]

This sounds like great news to me. Hopefully we get an idea next week how quickly they can ramp up production of Biostream at this new facility.

[whognu1]

 that's a nice pick up likely explains the big increase in volume lately nevertheless, picking up a 'highly skilled' workforce in these time is really a positive good luck

[Mick67]

Watch the massive upward revisions by analysts.  Upon completion of a ramp in production this should double revenues from this year to over $200mm with the existing business and BGX capacity increase and service revenue growth.  And i down think you expand if your costs arent trending the right direction and the demand is not there.  That webinar was worth every minute of taking in

[Possibleidiot01]

Needed more production capability. Done. Highlights the number of potential customers ; omits waste water potential. Let's not overlook UEC is expected to generate approximately USD $35.0 million (CAD $43.3 million) in unaudited revenues from its existing business in 2021 Total consideration of USD $8 million (CAD $9.9 million) subject to certain holdbacks and adjustments Does

[Mick67]

In the lets not overlook category lets mark down U.S. domiciled BGX production that qualifies for US federal tax credits.  The future is really starting to shape up.

[sumpineh]

That was my first reaction too. It does seem very cheap but I will contain my enthusiasm until the more intelligent people go through the details..

[Mick67]

The negative is that they bought a business that is likely not very profitable just based on the price to revenue. That would be naive in my view as the positive is that they have an underutilized but skilled labour force that is ready to ramp BGX production.  Scale will help the legacy business margins and they got immediate capacity very cheap.  Better than building your own. Plus you

[Ciao]

They usually buy a business based on a multiple of EBITDA, so it looks cheap as UEC may not be highly profiitable, but their focus for the purchase is for BGX capacity.  UEC is a great opportunity for a turnaround specialist like Mike Munro.  "Mr. Munro had a longstanding career at GE as a Vice President and General Manager in several business units and was recognized for his skill

[sumpineh]

You hit the nail on the head,As Usual. Thanks for all you contribute.

[catchascatchcan]

I would agree.  We are buying an underperforming business, but for the right reasons, and what I would hope is at the right price.  Given the land value and 100K sqft facility, we are valuing the underlying buniess at very little.  Given that, I dare say the PR is a bit misleading, as many readers would understand that we're picking up dollars for pennies.  But that said

[Mick67]

I politely disagree that there was leaked info here as the clean energy sector been on a tear and XBC continues to be a laggard. So speculate all you want but i think this caught analysts and sophisticated investors off guard. Also - it appears the existing business continues and that there is excess capacity to add ramp in BGX and have the labour force and capacity to do it.  Don't be so

[catchascatchcan]

Fair point, and the run on the green space has helped no doubt.  We'll know tomorrow in my mind.  If the bump is muted, then that's our answer.  GLTA

[Ciao]

Highly unusual for this news to be released at this time during market hours with 1/2 an hour to go.  Did someone make an error. A lot of people will not catch this news, full impact likely to be seen tomorrow. Purchase gives them a nice boost in rev as well. With additional capacity, we can expect another MSA BGX Biostream order with another customer.

[ace1mccoy]

That's bang on what I thought ,  someone messed up by releasing during trading hrs.  . A lot of people will not catch this news, full impact likely to be seen tomorrow. Purchase gives them a nice boost in rev as well. With additional capacity, we can expect another MSA BGX Biostream order with another customer.

[Gann999]

I don't think anyone messed up I think they were giving those who follow the company a gift a chance to buy end of day before the news is digested. I suspect we will gap up tomorrow and have target revisions upwards a little and finally a positive outlook from TD.

[Ciao]

It's a material event, so they needed to do timely disclosure. It's been known they were looking for a US plant, we just didn't know when.

[Gann999]

Fair enough but what exactly is timely disclosure? A day, 3 days, 5 days maybe they saw the downgrade and said enough is enough.

[Ciao]

Newt, Timely disclosure is defined in TSX regulations.  I would say a day max for this material event.  Your thought that this deal was signed and sitting in someone's pocket is far fetched. You acutually think that they released the news 1/2 hr before the trading day was over because some analyst downgraded the stock earlier in the day or yesterday? Was the stock tanking (no it

[Gann999]

I understand what you are saying but you can still arrange the finalizing of the deal for a day that is favorable to your company no? Like close to earnings? I don't know that timely disclosure would mean 1 day I would imagine that legal term could be up for debate I can't seem to find anything that specifies a specific time frame. I don't think the downgrade was a specific reason for

[Ciao]

This material event requires immediate disclosure. https://www.tsx.com/resource/en/70 As for wanting and understanding the need for capacity, Kurt mentinoed it in the Radius Research interview as their #1 priority. It was also one of 3 catalyts I mentioned a while back along with another MSA BGX agreement and Q3 results (hopefully a positive catalyst).

[Gann999]

It's a 14 page document on the procedure for material changes also there is a difference between material change and material information and it seems to be up to the company to decide which definition it is. 10 days to disclose to the exchange is what I saw I really didn't feel like reading it right now just glanced it's a lot of information. They have to be granted permission to

[kulewater]

I also thought maybe this PR had 'escaped' but based on the syncronization of this release via multiple channels I doubt thats likely. Nobody can claim this isnt a positive development. A couple of things to consider regarding the interesting timing: There could be a follow-up order NR that is coming tomorrow and they needed to precede it with this news. There could be an

[Gann999]

If it wasn't leaked that's even better as we have been running up to earnings possibly which is a good sign then throw this news on top even better. The timing of the rally and then news is a little suspect though especially considering the past couple times it rallied.

[Zipolitemexico]

This part of the release caught my attention. “Xebec expects that with limited changes to operations it can use UEC’s excess capacity to produce approximately 150 to 190 containerized BGX Biostream™ (“Biostream”) biogas upgrading and Hy.GEN hydrogen units per year in North America. The new capacity from UEC adds to recent capacity increases in Xebec’s Canadian manufacturing facility” Blainville

[Gann999]

It's not really clear how much of the 150 to 190 is Biostream and how much is hydrogen units my guess would be 100 Biostream units and the rest are hydrogen units

[sjc444]

There will be lots of questions to be answered about the new facility during next week's quarterly webinar as can be seen in the posts since the nr was broadcast.

[kulewater]

If we focus on the word excess it means the legacy revenue generated by UEC will be supplemental to what they forecast for BGX+H2 units. Transformational and material. This part of the release caught my attention. “Xebec expects that with limited changes to operations it can use UEC’s excess capacity to produce approximately 150 to 190 containerized BGX Biostream™ (“Biostream

[Ciao]

At the low end of conservative estimates, 50 BGX units at Blaineville and 50 BGX units at UEC (start up volume) in 2022 alone represents $190M CDN in revenues, far exceeding the top end of XBCs 2021 rev guidance. No reason they can't sell whatever they can produce next year. Even at $500M CDN a year from BGX it's still a very small slice of the pie. There's over 8000 dairy farms and

[tamaracktop]

Yes! And add to that the $250 million guidance from the Service business alone by 2025 and you have a multi-year exponential growth story. How do you put a multiple on that?