Canadian company to acquire Colorado's Confluence Energy
Vancouver, British Columbia-based Viridis Energy Inc. is on the verge of more than doubling its pellet production capacity and expanding its distribution reach, having entered into a letter of intent to acquire 100 percent of the outstanding shares of Colorado-based Confluence Energy.
Confluence currently has a production capacity of 80,000 tons, but that is expandable to 125,000 tons, according to Viridis. Confluence manufactures wood pellets utilizing pine beetle killed wood, which Viridis said is consistent with its company vision, and supplies several large retail customers. The mountain pine beetle infestation is predominately focused on western North America, from Mexico to British Columbia, where an estimated 29 million acres are threatened, according to Viridis. In Colorado and Wyoming alone, mountain pine beetles are responsible for the destruction of an estimated 2 million acres.
The acquisition will expand the distribution reach of Viridis to both the U.S. East and West Coasts, providing more efficient access to ports that serve international markets, said company CEO Chris Robertson. “Our mission is to aggressively expand our operations and achieve scale,” he said. “We are in the midst of growing our business geographically as well as entering into new markets. The demand for clean, inexpensive alternative fuel is growing rapidly. ” The transaction is expected to close during the first half of this year.
Viridis already operates two other acquisitions in the wood pellet sector and noted that Mark Mathis, founder and CEO of Confluence, will continue to manage the Confluence pellet mill under Viridis’s ownership and will assume a senior management role within Viridis.
“Joining forces with Viridis will strengthen our efforts to develop a solid national retail platform, while reinforcing Viridis’ vertical integration strategy and supporting its drive to achieve economies of scale that will yield cost efficiencies and expanded sales opportunities,” Mathis said.