PyroGenesis Canada Inc (TSE:PYR) (NASDAQ:PYR) (FRA:8PY) announced that it has signed a binding letter of intent to acquire AirScience Technologies Inc for C$4.8 million, which will be settled in either cash or stock at the discretion of PyroGenesis.
The acquisition of AirScience Technologies, which designs and builds gas upgrading systems to convert biogas into renewable natural gas, would establish PyroGenesis’ entry into the renewable natural gas marketplace while expanding its greenhouse gas reduction portfolio.
“PyroGenesis believes that AirScience Technologies’ experience in biogas upgrading, combined with PyroGenesis’ engineering and multidisciplinary skills, as well as its proven record of meeting the exacting demands of multi-billion-dollar companies and the US military, positions the combination well to address the opportunities arising from this growing need to clean biogas,” PyroGenesis Canada CEO Peter Pascali said in a statement.
PyroGenesis noted that AirScience Technologies currently has about $10 million to $12 million in contract backlogs all of which are expected to be completed within 18 months, along with $12 million to $14 million in its pipeline.
It pointed out that AirScience has posted an average gross margin over the last four years (2016-2019) in excess of 40% and the company was profitable in 2019 on about $4.7 million in revenues.
Renewable natural gas (RNG), also known as biomethane, is produced from organic waste in landfills, household waste, agricultural waste and wastewater sludge. Companies such as AirScience Technologies can sell the RNG it converts from landfills into the natural gas pipeline network, thereby reducing the need for conventional gas.
PyroGenesis said there are only 130 plants currently producing RNG in North America, with a potential need for an additional 100 over the next two years, and an additional one thousand in a 2 to 10-year time horizon.
AirScience Technologies is also active in the purification of coke-oven gas - a by-product in the primary steel industry arising from the conversion of coal into coke), into high purity hydrogen - which PyroGenesis says is highly sought after in the industry.
PyroGenesis is a high-tech company that designs, develops, manufactures, and commercializes plasma atomized metal powder, plasma waste-to-energy systems, and plasma torch products.
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