SGD acquires Resource Group to expand green solutions

MIAMI - Safe and Green Development Corporation (NASDAQ: SGD), a real estate and development firm whose stock has surged over 34% in the past week according to InvestingPro data, has completed the acquisition of Resource Group US Holdings LLC, a company specializing in converting organic green waste into engineered soil and mulch products. The move is a significant step in SGD’s shift toward revenue-generating activities and expands its portfolio of environmentally friendly soil solutions.

Resource Group, known for its advanced engineered soils and compost business, operates under Resource Group US LLC, along with Zimmer Equipment, a regional transportation business. Their operations include a permitted composting facility, two green waste aggregation sites, and a transportation fleet, creating an integrated platform for managing organic waste. The acquisition comes at a crucial time for SGD, which InvestingPro analysis shows has been rapidly burning through cash with a concerning debt-to-equity ratio of nearly 70%.

The acquired company also brings to SGD its proprietary SURGRO™ technology, which produces a sustainable substrate alternative to traditional horticultural mixes. This innovation aligns with emerging "peat-free" regulations and offers benefits such as local sourcing and circular economy practices.

SGD’s CEO, David Villarreal, expressed that Resource Group’s operational excellence and innovative technologies align with SGD’s vision of building a greener future, emphasizing the potential for increased revenues and shareholder value.

As part of the acquisition terms, SGD issued shares of its common stock and Series A Convertible Preferred Stock to Resource Group’s Equityholders, along with promissory notes due on the first anniversary of the closing. Additionally, SGD’s board of directors is set to be reconstituted, incorporating directors designated by Resource Group’s Equityholders.

The transaction details will be outlined in a proxy statement to be filed with the SEC, which will be made available to investors and security holders for review.

SGD, which was formed in 2021, focuses on developing sites with prefabricated modules and has a subsidiary, Majestic World Holdings LLC, with a real estate AI platform. Another subsidiary, MyVONIA Innovations LLC, owns MyVONIA, an AI-powered personal assistant.

This strategic acquisition is part of SGD’s larger goal to enhance its environmental impact and operational scale. The information is based on a press release statement. According to InvestingPro analysis, SGD currently shows a WEAK financial health score, with 15+ additional insights available to subscribers, including detailed valuation metrics and growth projections that could be crucial for investors evaluating this strategic move.

In other recent news, Safe and Green Development Corporation announced that it is proceeding with the acquisition of Resource Group US Holdings LLC. The acquisition, which is subject to standard closing procedures and the completion of Resource Group’s audit, is expected to close without further contingencies. Resource Group has reported unaudited revenue growth from $16 million in 2023 to $19.1 million in 2024, with projected pro forma revenues of approximately $25 million in 2025 post-acquisition. This move is anticipated to enhance SGD’s financial profile and market presence significantly.

Additionally, SGD’s Board of Directors has approved a stock dividend, where shareholders will receive 0.05 additional shares for each share owned. The record date for this dividend is April 7, 2025, and distribution is set for April 22, 2025. In terms of strategic direction, SGD plans to leverage Resource Group’s technology to expand its operations in the composting and engineered soils industry, with a focus on redeveloping land opportunities.

The company has highlighted its commitment to advancing its real estate development pipeline and proprietary technology platforms. Analyst firms have not been mentioned in the recent updates, but the company remains focused on generating cash flow and increasing shareholder value. Investors are encouraged to review the proxy statement and related documents filed with the SEC for more detailed information about the acquisition.

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