ESG company Cavitation Technologies Inc. (CTi) has signed a letter of intent (LOI) to acquire Eagle Ford Silica Sand LLC for $20 million, the company said in a June 15 press release. (Source: Shutterstock.com)
ESG company Cavitation Technologies Inc. (CTi) has signed a letter of intent (LOI) to acquire Eagle Ford Silica Sand LLC for $20 million, the company said in a June 15 press release.
Cavitation will acquire Eagle Ford Silica’s approximately 180 acres of land near San Antonio, Texas, and a sand extraction plant that produces an average 2,000 metric tons (mt) of sand per day. The plant has a capacity of 8,000 mt/d.
CTi said the acquisition is anticipated to be immediately accretive to its earnings and would also immediately provide positive cash flow for the company.
Eagle Ford Silica uses between 4,000 gallons and 5,000 gallons of fresh water per minute. CTi said its chemical-free treatment technology will reduce operating costs and mitigate the environmental impact once it is incorporated into the sand company’s operations. The water treatment technology is used to clean and recycle water used in the fracking process. CTi targets many of the same customers that are supplied by Eagle Ford Silica.
“This dynamic provides synergies for both companies that will allow for increased economies of scale and is anticipated to increase growth opportunities for a combined company,” the company said in its press release.
The LOI requires several conditions before the transaction will be completed, including due diligence, inspection and review of Eagle Ford Silica’s operations.
The deal can be terminated if certain conditions are not met by Sept. 15, 2023.
CTi CEO Neil Voloshin said the proposed merger would provide the company with an opportunity to expand its oil and gas business.
“Eagle Ford will provide an immediate positive cash flow thus permitting a much-needed boost in our water treatment expansion,” he said. “Our objective of this transaction is to substantially increase shareholder value and profitability of CTi.”
Ignacio Martinez, president of Eagle Ford Silica said the synergy created between the two innovative companies was “astounding.”
“Not only will it maximize the economic benefit of these two entities by providing both the sand needed for fracking and an eco-friendly produced water remediation and recycling service, but it will also largely reduce the need for freshwater use in current fracking operations which will benefit the environment as well,” he said.
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