Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer of
specialty alcohols and essential ingredients, has acquired Eagle
Alcohol Company LLC, a leading distributor of specialty alcohols
headquartered in St. Louis, Missouri. The acquisition is expected
be immediately accretive and grow Adjusted EBITDA by $7 million to
$9 million annually in 2023 and beyond, including expected
synergies.
Eagle specializes in break bulk distribution of specialty
alcohols. The company purchases bulk alcohol from suppliers,
including Alto. Then it stores, denatures, packages, and resells
alcohol products in smaller sizes, including tank trucks, totes,
and drums, that garner a premium to bulk alcohols. Eagle delivers
products to customers in the beverage, food, pharma, and
related-process industries via its own dedicated trucking fleet and
common carrier. Eagle generated over $35 million in revenues in
2021. Eagle is now a wholly owned subsidiary of Alto, and its
former president Dan Croghan, will remain with the company and has
been named Vice President of Alto and General Manager of Eagle.
Croghan and his team bring over 60 years of combined experience and
expertise in the chemical and alcohol distribution industry.
“We have been aggressively diversifying our business to focus on
specialty alcohols and essential ingredients. By acquiring an
established leader in premium alcohol distribution, we expand our
scope of offerings, customer base, and commercial opportunities as
well as significantly accelerate our penetration of new high-margin
markets,” said Michael Kandris, Alto Ingredients’ president and
CEO. “Eagle’s St. Louis distribution center specializes in
small-packaged products preferred by a large segment of the
specialty alcohol market, including beverage alcohol companies.
Combining Alto’s low-cost bulk production with Eagle’s
differentiated distribution capabilities and customer relationships
is expected to lower our exposure to bulk alcohol price volatility,
increase our margins, and create new opportunities for organic
growth.”
Croghan said, “I am very excited to join Mike and his team. Alto
Ingredients has made substantial progress reorienting its
production to emphasize specialty alcohols over the past few years.
We expect to be able to seamlessly continue to service our existing
customers, and Eagle will benefit from Alto’s scaled production,
back-office capabilities, and financial resources. We see
opportunities for growth that neither company could have easily
achieved separately.”
Kandris concluded, “We plan to continue to raise the quality of
our production to the highest grades of grain neutral spirits by
further enhancing Alto’s distillation process, optimizing Alto’s
production capabilities, and integrating Eagle’s strong
distribution and sales services. We expect this acquisition to
yield significant opportunities and additional financial benefits,
contributing immediately and expanding Alto’s Adjusted EBITDA by $7
million to $9 million annually in 2023 and beyond.”
Terms of the Agreement
Alto Ingredients acquired Eagle Alcohol Company LLC on January
14, 2022, for $14.0 million plus an estimated net working capital
adjustment of $1.3 million, funded from Alto’s cash on hand. The
shareholders of Eagle are eligible to receive up to an additional
$14.0 million of consideration payable in a combination of cash and
Alto Ingredients’ common stock subject to the shareholders’ being
employed by Alto and Eagle achieving certain financial targets over
the five-year period from closing.
About Alto Ingredients, Inc.
Alto Ingredients, Inc. (NASDAQ: ALTO) is a leading producer of
specialty alcohols and essential ingredients. The company is
focused on products for four key markets: Health, Home &
Beauty; Food & Beverage; Essential Ingredients; and Renewable
Fuels. The company’s customers include major food and beverage
companies and consumer products companies. For more information,
please visit www.altoingredients.com.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995
Statements and information contained in this communication that
refer to or include Alto Ingredients’ estimated or anticipated
future results or other non-historical expressions of fact are
forward-looking statements that reflect Alto Ingredients’ current
perspective of existing trends and information as of the date of
the communication. Forward looking statements generally will be
accompanied by words such as “anticipate,” “believe,” “plan,”
“could,” “should,” “estimate,” “expect,” “forecast,” “outlook,”
“guidance,” “intend,” “may,” “might,” “will,” “possible,”
“potential,” “predict,” “project,” or other similar words, phrases
or expressions. Such forward-looking statements include, but are
not limited to, statements concerning the benefits of the
acquisition of Eagle Alcohol Company including, Alto Ingredients’
expectations that the acquisition will be immediately accretive and
contribute $7 million to $9 million of Adjusted EBITDA annually in
2023 and beyond; Alto Ingredients’ expectations that the
integration of the two companies will increase margins, reduce
volatility, create access to new markets and accelerate Alto
Ingredients’ penetration of new high-margin markets; Alto
Ingredients’ expectations that by combining Alto Ingredients’
low-cost bulk production with Eagle Alcohol Company’s
differentiated distribution capabilities and customer relationships
will lower Alto Ingredients’ exposure to bulk alcohol price
volatility, increase margins and create new opportunities for
organic growth; and Alto Ingredients’ other plans, objectives,
expectations and intentions including further enhancing Alto
Ingredients’ distillation process and optimizing its production
capabilities. It is important to note that Alto Ingredients’ plans,
objectives, expectations and intentions are not predictions of
actual performance. Actual results may differ materially from Alto
Ingredients’ current expectations depending upon a number of
factors affecting Alto Ingredients’ business and its production
facility enhancement initiatives. These factors include, among
others, adverse economic and market conditions, including for
specialty alcohols and essential ingredients; export conditions and
international demand for the company’s products; fluctuations in
the price of and demand for oil and gasoline; raw material costs,
including production input costs, such as corn and natural gas; and
the effects – both positive and negative – of the coronavirus
pandemic and its resurgence or abatement. These factors also
include, among others, the inherent uncertainty associated with
financial and other projections; the anticipated size of the
markets and continued demand for Alto Ingredients’ products; the
impact of competitive products and pricing; the risks and
uncertainties normally incident to the specialty alcohol production
and marketing industries; changes in generally accepted accounting
principles; successful compliance with governmental regulations
applicable to Alto Ingredients’ facilities, products and/or
businesses; changes in laws, regulations and governmental policies;
the loss of key senior management or staff; and other events,
factors and risks previously and from time to time disclosed in
Alto Ingredients’ filings with the Securities and Exchange
Commission including, specifically, those factors set forth in the
“Risk Factors” section contained in Alto Ingredients’ Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission on November 12, 2021.
Media Contact:
Bryon McGregor, Alto Ingredients, Inc., 916-403-2768,
mediarelations@altoingredients.com
Company IR Contact:
Michael Kramer, Alto Ingredients, Inc., 916-403-2755,
Investorrelations@altoingredients.com
IR Agency Contact:
Kirsten Chapman and Dusty Buell, LHA IR, 415-433-3777,
Investorrelations@altoingredients.com
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