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Acquisition Strengthens Environmental Solutions Company

Jocelyn Aspa Jocelyn Aspa, The Market Herald
1 Comment| March 15, 2022

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Environmental solutions are integral now more than ever and companies like Vertex Resource Group Ltd, (TSX-V.VTX, Forum) are at the forefront of these pressing solutions. Based out of Alberta, Vertex has been around for over half a century providing environmental solutions, in addition to offering environmental consulting, field services and equipment.

At a broad scale, the company’s services are implemented in industries ranging from oil and gas, oil sands and petrochemicals to renewable energy, utilities, agriculture, forestry and drilling among many others.

As the company continues its growth and expansion, it recently announced it had acquired Cordy Oilfield in order to help the company strengthen its services and offerings across its wide range of operations.


Vertex to acquire Cordy Oilfield

In a press release, the company said the acquisition is structured as a three-cornered amalgamation under Alberta’s Business Corporation Act where shareholders of Cordy Oilfield will receive common shares of Vertex. A wholly-owned subsidiary, Vertex Energy Services, will amalgamate with Cordy Oilfield which will result in Vertex owning all of the issued and outstanding shares of the blended corporation.

"This strategic acquisition allows Vertex to complement multiple offerings within our group. We are excited to bring Cordy under our umbrella, providing customers and employees with a next level experience. Congratulations to the Cordy team on their successes over the years, and we look forward to supporting that continued success," Terry Stephenson, president and CEO of Vertex, said in a press release.

The two companies believe the acquisition will create a stronger environmental services business that will provide enhanced free cash flow generation through integrating. Other benefits of the companies blending together include:

  • Environmental services that can provide enhanced scale, utilization and growth through cross-selling services to both company customers
  • Estimated annual integration cost savings of $1 million are expected to be realized 12 to 18 months following the acquisition closing
  • Improved cost structure
  • Strong pro forma financial position
  • Enhancing both entity’s position in delivering on environmental, social and governance initiatives
  • Cordy shareholders having shares of a larger organization with a history of growth and access to markets that will help develop Cordy’s operations

The acquisition will be subject to approval of Cordy shareholders and applicable corporate and securities laws, which will take place at a special meeting on April 22, 2022, in addition to approval of the TSX Venture Exchange.


Vertex in the news

In addition to the acquisition of Cordy, Vertex announced it closed a non-brokered private placement of $15 million of a secured subordinated convertible debenture, which will have a five year term from the date of issue. The convertible debenture will have interest rates at 8% per year from the date of issue paid monthly in arrears of cash.

The term will mature on March 7, 2027. Proceeds of the private placement will be used to fund ongoing obligations, post acquisition and future acquisitions and working capital.


The investment corner

Now that the company has closed its private placement, Vertex remains in a strong position to execute on its deliverables and beyond. Thanks to its pending acquisition of Cordy, Vertex is also in line to be a dominant player in the sector that rebounded in 2021 and will be a company that investors will want to keep their eyes on as it looks to execute its goals in 2022 and beyond.

For more information, please visit vertex.ca.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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