NEWS
Viridis Energy Inc. Enters Letter of Intent to Acquire Confluence Energy, Colorado-based premium pellet manufacturer
March 3, 2011Viridis Energy (“Viridis”)(TSXV: VRD, OTCQX: VRDSF) announced today that it has entered into a letter of intent to acquire 100% of the outstanding shares of Confluence Energy LLC. ("Confluence"), one of the largest wood pellet plant in the western half of the U.S. This transaction, subject to the applicable policies of the TSX Venture Exchange, will be structured as an earn-out and be accomplished through a share exchange of Viridis Energy common stock and the assumption of debt. The transaction is expected to close during the first half of the current year and is projected to be accretive to the Company’s earnings per share during the first year.
Confluence Energy is a Colorado based, wood pellet manufacturer and distributor with a capacity of 80,000 tons (expandable to 125,000 tons) per year of packaged wood pellets. Consistent with Viridis’s vision, Confluence manufactures wood pellets utilizing pine beetle kill wood (wood from trees killed by mountain pine beetle infestation), a biomass feedstock that is plentiful in the rocky mountain region. The company is a supplier to several large retail customers including national big-box home improvement stores. Confluence was featured in Forbes© magazine in September 2009 for its accomplishment in creating Colorado’s first pellet mill and its focus on creating an opportunity from a potential catastrophic situation, in turning trees decimated by the mountain pine beetle into a renewable energy source.
Mountain pine beetles infestation is predominately focused on western North America, from Mexico to British Columbia, where an estimated 29 million acres are threatened. In Colorado and Wyoming alone, mountain pine beetles are responsible for the destruction of an estimated 2,000,000 acres or 45-60 million of pine trees. Converting the resulting dead trees into high efficiency pellets to be used as fuel, not only serves as a clean energy source, but also helps forests regenerate faster. In addition, wood pellets are more efficient than cord wood for heating as they convert 85% of the pellet’s energy into heat, compared to 70% for cord wood, and generate less smoke and soot, making them more environmentally friendly.
“We evaluated several U.S. and Canadian plants for this stage of our development and selected Confluence as the best synergistic fit from the standpoint of consistent quality of product, customers and footprint. With the Confluence acquisition, Viridis more than doubles its production capacity and expands its distribution reach to both the East and West Coasts of the United States, providing a more efficient access to ports that serve international markets,” says Chris Robertson, chief executive officer of Viridis Energy. “Our mission is to aggressively expand our operations and achieve scale. We are in the midst of growing our business geographically as well as entering into new markets. The demand for clean, inexpensive alternative fuel is growing rapidly. ”
The Company also noted that Mark Mathis, Confluence’s founder and CEO, will continue to manage the Colorado operation, and assume a senior management role within Viridis upon the completion of the transaction.
Commenting on the proposed transaction, Mark Mathis added, “Joining forces with Viridis will strengthen our efforts to develop a solid national retail platform, while reinforcing Viridis’ vertical integration strategy and supporting its drive to achieve economies of scale that will yield cost efficiencies and expanded sales opportunities.”
The Company intends to disclose details on the transaction upon its completion.
About Viridis Energy Inc.
Viridis Energy Inc. (TSX: VRD-V) is a publicly traded, "Cleantech" alternative energy company specializing in the agricultural and wood waste biomass. Located in Vancouver, B.C., Viridis Energy operates Cypress Pacific Marketing and Okanagan Pellet Company, two acquisitions in the wood pellet sector, thus providing the company with vertical integration for distribution and manufacturing.
For more information on Viridis Energy Inc. please refer to the company website at www.viridisenergy.ca.
Forward-looking Statements: Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future operations. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a continued downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties associated with the demand for biofuels, (3) the risk that the Company does not execute its business plan, (4) inability to finance operations and growth (5) inability to retain key management and employees, (6) ; an increase in the number of competitors with larger resources, and (7) other factors beyond the Company’s control. These forward-looking statements are made as of the date of this news release and the Company intends to update such forward looking information in the Company's MD&A; in the event that actual results differ materially from such forward-looking statements contained herein. Additional information about these and other assumptions, risks and uncertainties are set out in the “Risks and Uncertainties” section in the Company’s MD&A; filed with Canadian security regulators.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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