- Establishes Alta’s Master Dealer Equipment Distribution
Platform in North America
- Expands Product Portfolio and Diversifies End Markets with
Entrance into Environmental Processing Equipment
- Ecoverse’s $64.3 million in revenue, $10.0 million in net
income, $10.1 million in Adjusted EBITDA and $9.7 million of
Adjusted pre-tax net income on a trailing twelve-month basis is
expected to be immediately accretive to the Company’s free cash
flow conversion, profitability, and earnings per share ratios.
Alta Equipment Group Inc. (NYSE: ALTG) (“Alta” or “the Company”)
today announced that it has entered into a definitive agreement to
acquire Ecoverse Industries, LTD (“Ecoverse”), a full line
distributor of industry-leading environmental processing equipment
headquartered in Avon, Ohio, with 15 sub dealers throughout North
America.
“The acquisition of Ecoverse is exciting for our business as it
represents our first investment into large-scale equipment
distribution, giving us the master dealer rights to distribute
best-in-class environmental equipment to dealers and customers
throughout North America,” said Ryan Greenawalt, Chief Executive
Officer of Alta. “Ecoverse has a long standing track record in the
environmental processing equipment sector as a distributor of
high-end equipment which is used in biofuel, composting, and
various waste and recycling applications. The Ecoverse acquisition
immediately positions Alta as an industry leader in a sector where
demand for eco-friendly waste solutions and recycling continues to
grow. We welcome Ecoverse to the Alta family.”
Strategic and Financial Highlights
- Exclusive distribution rights to North America for European
equipment OEMs, including Doppstadt, Backus, Backers, and Tiger
Depackaging products.
- Increasing size of equipment field population in North America
will provide for future parts and service growth opportunity.
- Ecoverse generated approximately $64.3 million in revenue,
$10.0 million in net income, Adjusted EBITDA of $10.1 million, and
$9.7 million of Adjusted pre-tax net income for the trailing twelve
month period through July 2022.
- Given Ecoverse’s asset-light distribution business model and
minimal maintenance capex requirements, the Company expects the
acquisition to be highly accretive to the Company’s EBITDA to cash
flow conversion and earnings per share ratios.
- Deal is structured as an asset acquisition allowing for step-up
in tax basis of assets acquired.
Additional Transaction Details
- The purchase price includes $42.5 million in cash, $2.5 million
of Alta common stock and a $6.0 million seller note, at close. In
addition, the purchase price includes contingent consideration in
the form of an earn-out whereby sellers can earn an additional $4.0
million of Alta common stock and $12.0 million of cash over a
five-year period subject to future EBITA growth.
- To the extent EBITA remains flat at July 2022 trailing
twelve-month levels throughout the earn-out period, the total
purchase price will be $59.0 million ($52.5 million in cash and
$6.5 million in stock). Other iterations of the ultimate purchase
price range from $51.0 million to $67.0 million based on future
EBITA performance.
- Ecoverse’s brand name, employees, and management team will
remain in place post-close.
- The transaction is subject to customary closing conditions and
is expected to close in the fourth quarter of 2022.
- Including Ecoverse, since the Company’s initial public offering
in 2020, Alta has completed 13 acquisitions which have contributed
$440.3 million in revenue, and $52.5 million in Adjusted
EBITDA.
- More information on Ecoverse, its products and applications can
be found at www.ecoverse.net.
About Alta Equipment Group Inc.
Alta owns and operates one of the largest integrated equipment
dealership platforms in the U.S. Through its branch network, the
Company sells, rents, and provides parts and service support for
several categories of specialized equipment, including lift trucks
and aerial work platforms, cranes, earthmoving equipment and other
material handling and construction equipment. Alta has operated as
an equipment dealership for 38 years and has developed a branch
network that includes over 65 total locations across Michigan,
Illinois, Indiana, New England, New York, Virginia, Florida, Ohio,
Ontario, and Quebec. Alta offers its customers a one-stop-shop for
their equipment needs through its broad, industry-leading product
portfolio. More information can be found at www.altaequipment.com.
Forward Looking Statements
This presentation includes certain statements that may
constitute “forward-looking statements” for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements may include, for example, statements about: our future
financial performance; our plans for expansion and acquisitions;
and changes in our strategy, future operations, financial position,
estimated revenues, and losses, projected costs, prospects, plans
and objectives of management. These forward-looking statements are
based on information available as of the date of this presentation,
and current expectations, forecasts, and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing the parties’ views as of any subsequent date, and we
do not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
laws. You should not place undue reliance on these forward-looking
statements. As a result of a number of known and unknown risks and
uncertainties, actual results or performance may be materially
different from those expressed or implied by these forward-looking
statements. Some factors that could cause actual results to differ
include, but are not limited to: (1) the outcome of any legal
proceedings that may be instituted against us relating to the
business combination and related transactions; (2) the ability to
maintain our listing of shares of common stock on the New York
Stock Exchange; (3) the risk that integrating our acquisitions
disrupts our current plans and operations; (4) the ability to
recognize the anticipated benefits of our business combination and
acquisitions, which may be affected by, among other things,
competition, our ability to grow and manage growth profitably, our
ability to maintain relationships with customers and suppliers and
retain our management and key employees; (5) changes in applicable
laws or regulations; (6) the possibility that we may be adversely
affected by other economic, business, and/or competitive factors;
(7) disruptions in the political, regulatory, economic and social
conditions domestically or internationally; (8) major public health
issues, such as an outbreak of a pandemic or epidemic (such as the
novel coronavirus COVID-19), which could cause disruptions in our
operations, supply chain, or workforce; and (9) and other risks and
uncertainties identified in this presentation or indicated from
time to time in the section entitled “Risk Factors” in our annual
report on Form 10-K and other filings with the U.S. Securities and
Exchange Commission (the “SEC”). The company cautions that the
foregoing list of factors is not exclusive, and readers should not
place undue reliance upon any forward-looking statements, which
speak only as of the date made. We do not undertake or accept any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions or
circumstances on which any such statement is based.
*Use of Non-GAAP Financial Measures
We disclose non-GAAP financial measures Adjusted EBITDA, EBITA,
and Adjusted pre-tax net income in this press release because we
believe they are useful performance measures that assist in an
effective evaluation of the acquisition and its expected impact on
our operating performance when compared to our peers, without
regard to financing methods or capital structure. We believe such
measures are useful for investors and others in understanding and
evaluating the acquisition and its expected impact on our operating
results in the same manner as our management. However, such
measures are not financial measures calculated in accordance with
GAAP and should not be considered as a substitute for, or in
isolation from, net income (loss), revenue, operating profit, or
any other operating performance measures calculated in accordance
with GAAP.
We define Adjusted EBITDA as net income (loss) before interest
expense (not including floorplan interest paid on new equipment),
income taxes, depreciation and amortization, adjustments for
certain one-time or non-recurring items and other adjustments. We
exclude these items from net income (loss) in arriving at Adjusted
EBITDA because these amounts are either non-recurring or can vary
substantially within the industry depending upon accounting methods
and book values of assets, capital structures and the method by
which the assets were acquired. EBITA is defined as net income
(loss) before interest expense (not including floorplan interest
paid on new equipment), income taxes, and amortization. Adjusted
pre-tax net income is defined as net income (loss) before income
taxes adjusted to reflect certain one-time or non-recurring items
and other adjustments. Certain items excluded from Adjusted EBITDA
and Adjusted pre-tax net income are significant components in
understanding and assessing a company’s financial performance. For
example, items such as a company’s cost of capital and tax
structure as well as certain one-time or non-recurring items, are
not reflected in Adjusted EBITDA or Adjusted pre-tax net income.
Our presentation of Adjusted EBITDA, EBITA and Adjusted pre-tax net
income should not be construed as an indication that results will
be unaffected by the items excluded from these metrics. Our
computation of Adjusted EBITDA, and other non-GAAP measures, may
not be identical to other similarly titled measures of other
companies. Ecoverse’s financial information has not been audited by
Alta or its auditors and is subject to change. For a reconciliation
of non-GAAP measures to their most comparable measures under GAAP,
please see the table entitled “Reconciliation of Non-GAAP Financial
Measures” at the end of this press release.
Reconciliation of Non-GAAP
Financial Measures
Twelve Months Ended July 31,
2022
(amounts in millions)
Net income
$
10.0
Income tax provision
—
Other adjustments (2)
(0.3
)
Adjusted pre-tax net income (1)
$
9.7
Depreciation and amortization
0.3
Interest expense
0.1
Adjusted EBITDA (1)
$
10.1
(1) Represents Non-GAAP measure
(2) Other adjustments primarily related to
expected incremental expenses post-close
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221018005540/en/
Investors: Kevin Inda SCR Partners, LLC IR@altg.com (225)
772-0254
Media: Glenn Moore Alta Equipment glenn.moore@altg.com
(248) 305-2134
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