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DUBLIN - Fusion Fuel Green PLC (NASDAQ:HTOO), an energy services provider currently trading at $0.23 per share, has announced its intention to acquire a British fuel distribution company for a total consideration of £50 million. The deal involves a mix of cash, debt financing, capital raise, and Fusion Fuel shares, with additional payments post-closing. According to InvestingPro data, the company's current market capitalization stands at just $4.02 million, making this a notably ambitious acquisition given its size and existing financial position.
The target company, which remains unnamed, reported over $50 million in revenue and $4 million in net income for the year ending in 2023 and saw an increase to over $54 million in revenue and $7 million in net income in 2024. This acquisition is set to enhance Fusion Fuel's energy distribution capabilities and marks a strategic expansion into the UK market. InvestingPro analysis indicates potential challenges ahead, as Fusion Fuel currently operates with negative EBITDA of -$21.73 million and shows concerning cash burn rates.
John-Paul Backwell, CEO of Fusion Fuel, stated that this move aligns with the company's growth strategy, following the acquisition of Quality Industrial Corp. last year. He emphasized the importance of building a synergistic portfolio in the energy sector, highlighting the potential for increased revenues and profitability. However, InvestingPro data reveals the company's overall financial health score is currently rated as WEAK, with significant debt obligations that may impact its acquisition strategy. For detailed analysis and 19 additional ProTips about HTOO's financial position, investors can access the comprehensive Pro Research Report.
The letter of intent is non-binding, with the final transaction contingent upon due diligence, definitive agreements, and regulatory approvals. Fusion Fuel anticipates providing updates as discussions progress. The company's stock has experienced significant volatility, with a year-to-date decline of 59.14%.
Fusion Fuel, known for its Al Shola Gas and BrightHy brands, offers energy supply, distribution, and engineering advisory services. Al Shola Gas delivers industrial gas solutions, while BrightHy focuses on hydrogen solutions for decarbonization in various industries.
This proposed acquisition is based on a press release statement and is subject to change as further developments occur.
In other recent news, Fusion Fuel Green PLC has finalized a $1.3 million private placement of senior convertible notes, aiming to bolster its financial standing and investor confidence. The company has also been approved to transfer its listing to the Nasdaq Capital Market, which provides an additional 180-day grace period to meet the minimum bid price requirement. To maintain compliance with Nasdaq's listing rules, Fusion Fuel has enhanced its stockholders' equity to approximately $12.0 million, surpassing the required $2.5 million minimum. This financial maneuver included acquiring Quality Industrial Corp. and establishing a $25 million equity line of credit.
In a strategic shift, Fusion Fuel has appointed Frederico Figueira de Chaves as interim CFO following Gavin Jones's resignation. Figueira de Chaves, who previously served as CFO, will continue his current roles while guiding the company through its next growth phase. The leadership change aligns with Fusion Fuel's focus on expanding its hydrogen solutions and gas services businesses. These developments reflect the company's ongoing efforts to strengthen its position in the energy services market.
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