SPMI Closes Asset Purchase Agreement with Auto Recycling of Montgomery, Inc.
Marketwired MarketwiredMarch 28, 2017Comment
ATLANTA, GA--(Marketwired - Mar 28, 2017) - Speedemissions, Inc. ( OTC PINK : SPMI ) (the "Company"), a leading vehicle emissions testing and safety inspections company operating 22 stores in the Atlanta and St. Louis markets, and developer of CARbonga-SRI, the revolutionary automobile diagnostic iPhone app, and BuyCarSafety.com's ADVISR (Automotive Vehicle Information Safety Report) today announced that it has closed an Asset Purchase Agreement with Auto Recycling of Montgomery ("ARM"), an Alabama corporation, pursuant to which the Company agreed to purchase certain assets of ARM, including land, buildings, equipment and inventory previously used by ARM in an auto recycling operation which ceased operations in June of 2014.
"This segment of the automotive industry has been carefully reviewed and studied as was noted in the shareholder update. There are a number of parallels between the salvage yard and emission testing industries. It's highly fragmented, has stable revenue streams and consistent cash flow. In addition, with the average age of cars in the U.S. at 11.6 years, we believe that it will offer us the opportunity to grow our business in a steady manner over the next few years," stated Rich Parlontieri, President/CEO.
With the Asset Purchase Agreement, Speedemissions intends to create an auto salvage business operation at the existing location in Montgomery, AL. but expects it will take approximately 60 days to hire employees and put the necessary business systems in place before sales operations can commence.
As part of an overall strategic initiative, Speedemissions has formed a wholly-owned subsidiary for the purpose of seeking future acquisitions within the auto recycling industry, subject to capital availability, in addition to its existing vehicle emission testing business operations.
"During our due diligence, we realized that there exists a significant number of industry candidates across the US and Canada that may present attractive opportunities for us. We are looking to focus on the $500,000 to $2.0 million dollar yard opportunities, initially," added Parlontieri.
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