GeoBio Energy, Inc. Closes the Acquisition of Magna Energy Services
Today : Tuesday 5 October 2010
GeoBio Energy, Inc. (Pink Sheets:GBOE) ("GeoBio") is pleased to announce the closing of the purchase of Magna Energy Services, LLC ("Magna"). The transaction closed on October 5, 2010. Satisfaction of certain post-closing debt obligations will be required. As of the closing, Magna becomes a part of GeoBio's operations - adding strong revenue growth (30% CAGR) and profitability (38% EBITDA) to GeoBio.
Magna, located in Aztec, New Mexico, is a chemical treatment and service company focused on oil and natural gas production improvement in the San Juan Basin shale play area of New Mexico. GeoBio believes the chemical business, in addition to the proposed acquisitions of Willow Creek Companies, Inc, a highly profitable (40% EBITDA) and growing (53% CAGR) pipeline construction company and a civil construction company both operating in the Piceance Creek Basin shale play area of Colorado, as well as Wyoming, North Dakota, and Utah, provide a solid platform for substantial growth.
GeoBio also expects to grow organically by (i) expanding geographically through the existing relationships of Magna and of GeoBio's pending business acquisitions and (ii) taking advantage of synergies between the companies' customer bases. Additionally, GeoBio intends to add to its revenue opportunities through multiple strategic acquisitions, which will add both geographic reach and new capabilities. At present, several additional acquisition opportunities are being evaluated.
"We are happy with the closing of the Magna acquisition," said GeoBio's incoming CEO, John Sams, "and we look forward to the successful integration of this established and profitable company into GeoBio operations, and to accelerating our planned growth strategy."
About GeoBio Energy:
GeoBio Energy's business model emphasizes the acquisition and operation of existing companies in the oil and gas services and energy industry. As oil and gas exploration continue in the face of ever rising demand, preparing and monitoring drilling sites and obtaining peak efficiency and production from existing, aging wells becomes increasingly important. GeoBio believes this to be a significant growth opportunity in its strategy to combine and consolidate companies in the oil and natural gas services sector.
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