GreenHunter Energy Announces Acquisition of Leading Gulf of Mexico Diesel Fuel Distributor
GREENHUNTER ENERGY, INC. (AMEX: GRH), announced today the execution of a definitive agreement to acquire one of the leading marine based diesel fuel, methanol, and lubricant suppliers located along the Gulf of Mexico. The acquisition of L&L Holdings (Louisiana), LLC, together with its wholly-owned subsidiary L&L Oil and Gas Services, LLC (“L&L”) collectively referred to as “L&L”, based out of Metairie, Louisiana, includes seventeen strategically located facilities along the coast of the Gulf of Mexico in Louisiana and Texas, including deepwater terminaling assets in three different locations, which primarily service the offshore oil & gas industry. The acquisition of L&L also includes a 25% interest in Highland Marine, LLC, a dedicated tug and barge operator to L&L which owns ten tug boats and fourteen barges.
GreenHunter Energy will acquire L&L in an all cash transaction scheduled to close prior to year-end for total consideration of approximately $27.5 million. L&L has an operating history that exceeds 50 years and includes approximately 160 employees. GreenHunter Energy has received and is currently evaluating a number of different proposals from third parties to finance the acquisition which should be non-dilutive to existing shareholders.
L&L’s existing customer base is approximately 1,000 and is predominately the Gulf of Mexico offshore oil and gas industry. Over the last three years, annual diesel sales to L&L’s customers have exceeded 130 million gallons. Upon closing, GreenHunter will begin the integration of our high-grade biodiesel produced in Houston into L&L’s distribution network. The summarized historical financial statements of L&L are as follows:
(in millions) (Jan. - Aug.) (unaudited) 2006 2007 2008 ------ ------ -------------- Sales $335.7 $365.3 $ 367.8 Cost of Goods Sold 298.4 327.3 333.5 Direct Expenses 24.6 25.6 21.1 Gross Profit 12.8 12.3 13.3 SG&A Expense 4.4 5.2 4.4 EBITDA (1) 8.8 8.2 8.9 Diesel Gallons Sold (Millions) 131.2 136.1 89.2 Lubricant Sales 44.5 46.5 35.3 (1)see reconciliation to GAAP measure on GreenHunter Energy's website
Commenting on the acquisition of L&L, Gary C. Evans, Chairman, President, and CEO of GreenHunter Energy, stated, “As we continue to execute on our business plan of becoming a fully integrated biofuels company, the acquisition of L&L and more importantly, the highly motivated management team and employees who will soon become part of our organization, put us another step closer to realizing our ultimate goal. We believe the strategic locations of L&L’s existing terminals along the Gulf Coast are simply irreplaceable and that our complementary asset base will give us a long-term competitive advantage. The true value of these assets will ultimately be determined in the future as we integrate our biodiesel and possibly other biofuels into L&L’s business operations. From a logistical viewpoint, our joint operations fit extremely well and give our Company an enviable distribution presence along the Gulf Coast region. From a start-up Company of less than two years of age with no assets or revenues, GreenHunter Energy is now poised to record operating revenues approaching $750 Million in fiscal 2009.”
Danny Brown, President of L&L Oil and Gas Services, commented, “Becoming a meaningful part of the GreenHunter Energy organization should benefit our broad customer base in a number of important ways. We will be working alongside a group of entrepreneurial individuals who are determined to build an enterprise that will have a meaningful impact on the fuel distribution market unlike that which we have previously known. After being owned by several foreign institutions for a number of years, we are proud to become part of a US-based enterprise once again.”
Any statements in this press release about future expectations and prospects for GreenHunter Energy and its business and other statements containing the words “believes,”"anticipates,”"plans,”"expects,”"will,” and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Energy undertakes no obligation to update these forward-looking statements in the future.
GreenHunter Energy is focused on the renewable energy sectors of wind, hydro, geothermal, solar, biofuels, and biomass power plants. Our assets consist of leases of real property for future development of wind energy projects located in Montana, New Mexico, California, Texas, Wyoming and The Peoples Republic of China, the nation’s largest biodiesel refinery located in Houston, Texas, biomass-fired power plants located in Brawley, California and Telogia, Florida, and an option to lease acreage associated with a terminaling facility in Port Sutton, Florida. Headquartered in Grapevine, Texas, GreenHunter Energy was formed to be the first publicly traded renewable energy company based in the U.S. that provides to investors a portfolio of diversified assets in the alternative energy sector. Additional information about GreenHunter Energy may be found at www.greenhunterenergy.com.