Green Equity - August 14, 2024
News about stocks involved in environmental markets.
Green Equity is a daily series dedicated to tracking emerging investment opportunities in environmental markets. Notable events include green investments, fundraising, M&A, and new public listings.
News From Public Companies
Zefiro Methane (ZEFI)’s subsidiary, Plants & Goodwin Inc. (P&G), has acquired a minority stake in Winterhawk Well Abandonment, a Calgary-based company specializing in technology to seal methane leaks in oil and gas wells. As part of the deal, P&G secured an exclusive U.S. patent license for Winterhawk’s "Casing Expansion Tool" and other related technologies, granting them sole rights to use, sell, and distribute these products in the U.S. The agreement also allows P&G to sublicense Winterhawk's technology to other companies, potentially generating additional revenue.
Kontrol Technologies (KNR) provided a corporate update alongside its Q2 2024 financial results. The company has successfully navigated challenges in recent quarters, strengthening its balance sheet by paying off remaining revolver and term loan balances and selling air monitoring assets to build cash reserves. Kontrol is now pursuing additional organic growth opportunities and strategic acquisitions. The company is targeting acquisition options with revenues between $1 to $5 million, strong recurring revenues, and gross margins in the 40-50% range.
Prime Drink Group (PRME) has entered into a second amended and restated share purchase agreement (SPA) to acquire all the shares of Triani Canada Inc. The revised SPA includes adjustments to the purchase price, bonus consideration, and the removal of a previously proposed 5:1 share consolidation. Under the agreement, Prime will pay $11.4 million in common shares at $0.125 per share and issue 11.2 million share purchase warrants. Additional bonus consideration of up to $23.5 million may be paid in shares if Triani meets specific EBITDA targets by March 2027. The transaction is expected to close in September 2024.
Rwanda has signed a memorandum of understanding (MoU) with Nano Nuclear Energy (NNE) to develop nuclear energy through the construction of small modular reactors (SMRs) and microreactors.
Price Targets & Reports
Jefferies upgraded Flex LNG (FLNG) from "Underperform" to "Hold" after the company secured $430 million in refinancing for three ships, freeing up $97 million in cash. Interest rate swaps have kept Flex LNG's interest expenses manageable, supporting their quarterly debt service. Jefferies noted that the company's active debt management and strong contracted revenue backlog should ensure dividend security.
TD Cowen has maintained a "Hold" rating on Clean Energy Fuels (CLNE) with a price target of $4.00, citing steady EBITDA expectations for fiscal 2024. While Clean Energy Fuels has benefited from stronger-than-expected fuel margins, a potential hiatus in new Renewable Natural Gas (RNG) project startups in 2025 could slow growth. However, catalysts such as the 45Z tax credit and expansion in the 15L engine market could drive future performance. The company's Q2 2024 results showed strong revenue and adjusted EBITDA growth, with optimism about RNG demand, particularly in the heavy-duty trucking industry.