Business
SMGI Announces Non-Binding Letter of Intent to Acquire Diversified Transportation Business in Northeastern United States
SMGI Announces Non-Binding Letter of Intent to Acquire Diversified Transportation Business in Northeastern United States.
About this update from Smg Industries, Inc.
[{"type":"text","content":"\n HOUSTON, TX, June 15, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire – SMG Industries Inc. (“SMG” or the \"Company\") (OTCQB: SMGI), a growth-oriented transportation services company focused on the domestic infrastructure logistics market, is excited to announce that it has entered into a non-binding letter of intent to acquire a diversified transportation business located in the Northeastern United States. The potential transaction, if consummated, is estimated to approximately double SMGI's annual revenue, increase adjusted EBITDA[1], bring about operational diversification, strengthen the Company's balance sheet, and add valuable expertise to its leadership team. The target company specializes in full truck load, dry bulk, liquids, intermodal, LTL, heavy haul, drayage and transload, as well as an “asset lite” brokerage business. The proposed acquisition is expected to be completed this summer and contribute to SMGI's revenue diversification and expansion efforts. Based on audited pro forma 2022 combined revenues of $153 million and pro forma Adjusted EBITDA1 of $18.2 million (which includes $2.5 million in cost synergies), this acquisition would create a larger regional transportation and logistics player across multiple markets in the United States. This strategic move also is expected to provide SMGI and the target company with enhanced cross-selling opportunities and improved penetration into new end markets, as well as strengthen the Company’s balance sheet post-closing. Commenting on the proposed acquisition, Mr. Matt Flemming, Chairman of SMGI, stated, \"The acquisition of the target company by SMGI would create an attractive and diversified platform. I expect the combined entity to establish itself as a larger, scalable, and more diversified transportation business, becoming a regional leader in Texas, the Southwest, and the Eastern Seaboard, in addition to improving customer relationships and reducing cyclicality and customer concentration. SMGI's due diligence review of the target acquisition has already commenced, and upon satisfactory completion, we intend to proceed towards executing a definitive acquisition agreement and closing the transaction as soon as all closing conditions are met by all parties involved.\" Strategic Deal Highlights: The proposed acquisition is expected to y...