REG - MyCelx Tech. Corp. MyCelx Tech. Cp-MYXR - Saudi Arabia Business Operation Sale

Mycelx TechnologiesAnnouncement

22/02/2024 07:00

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RNS Number : 0732E  MyCelx Technologies Corporation  22 February 2024

The information contained within this Announcement is deemed by MYCELX
Technologies Corporation to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

 

22 February 2024

 

MYCELX TECHNOLOGIES CORPORATION (AIM: MYX)

 

Saudi Arabia Business Operation Sale

 

MYCELX Technologies Corporation ("MYCELX" or the "Company"), the clean water
and clean air technology company transforming the environmental impact of
industry, is pleased to announce the sale of its Saudi Arabia business
operations, including equipment, inventory and contracts, for an acquisition
price of up to $7.125 million (the "Total Consideration") to Twarid Water
Treatment LLC ("Twarid"), who is owned by Magellan SPV Water Holdings Limited,
a company incorporated in Abu Dhabi Global Markets, which in turn is
ultimately owned by a Saudi Arabian consortium of investors. The Total
Consideration is split $3.125 million at closing with up to $4 million
deferred on an earn-out structure.

 

The earn-out period of 24 months starts immediately, and is based on Twarid
achieving revenue results similar to the Company's historic performance in the
country. The assets being sold have a net book value of $2.1 million, and the
Saudi Arabian business contributed 64% of consolidated group gross profit for
the year ended 2022.

 

The sale allows the Company to continue to grow its proprietary media and
product sales in Saudi Arabia, through an exclusive distribution agreement
with Twarid, whilst relinquishing financial and operational obligations
in-country.

 

As part of the Company's strategic plans, the proceeds of the sale will enable
the Company to focus on accelerating its marketing and sales plan for its
unique technologies in the Perfluoroalkyl and Polyfluoroalkyl Substances
("PFAS") remediation and Enhanced Oil Recovery ("EOR") markets. The Board
believes that these large, lucrative opportunities will deliver long term
value and sustainable growth by leveraging MYCELX's differentiated and
environmentally effective solutions.

 

The Company is confident that its well-established Saudi Arabian business will
continue to thrive under the legacy leadership, which the Company expects will
transfer to Twarid along with current employees. Their focus will be growing
media sales in the oil and gas, waste management, air, marine and PFAS
remediation markets in support of Saudi Arabia's Vision 2030 sustainability
goals.

 

Closing is subject to certain customary conditions, and is expected to take
place by 31 March 2024.

 

Connie Mixon, CEO, commented:

 

"We are delighted to announce the sale of our Saudi Arabia business operations
to Twarid. We have operated in Saudi Arabia for many years now and it has been
an important part of our growth. This agreement enables MYCELX to continue to
grow its proprietary media and products in an important market while
relinquishing sales and operations associated with its current Saudi Arabian
business.

 

This is a key step in the Company's efforts to place greater marketing and
sales resources on its exciting growth markets, PFAS and EOR, while still
being able to capitalize on strong demand for its offering in Saudi Arabia. We
look forward to working with Twarid as the Saudi business potentially gains
even greater market presence and as we focus resources on driving success in
PFAS and EOR. These markets are large, global opportunities that will bring
long-term value to the Company and where we can deliver innovative solutions
with a positive impact on the environment."

 

For further information, please contact:

 

 MYCELX Technologies Corporation

 Connie Mixon, CEO                                  Tel: +1 888 306 6843

 Kim Slayton, CFO

 Canaccord Genuity Limited (Nomad and Sole Broker)

 Henry Fitzgerald-O'Connor                          Tel: +44 20 7523 8000

 Ana Ercegovic

 Celicourt Communications (Financial PR)

 Mark Antelme                                       Tel: +44 20 7770 6424

 Jimmy Lea

 Charlie Denley-Myerson

 

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