Closing Includes Anticipated Simultaneous Sale of APPCO Real Estate to Institutional Investor in Leaseback Transaction Deleveraging APPCO Acquisition
Aug 30, 2007 - Titan Global Holdings, Inc. (OTCBB:TTGL), a high-growth diversified holding company, announced today that it and the sellers of Appalachian Oil Company, Inc. ("Appco") agreed to a closing date of September 12, 2007.
Appco is the first acquisition of the Company's recently announced Titan Energy Group, which has been formed to aggregate underutilized assets that can provide significant opportunities for revenue and earnings growth, such as the continued vertical integration of the supply chain, as well as future acquisitions to compliment Appco's existing retail and wholesale distribution footprint.
In addition, Titan has reached an agreement in principal with an institutional investor to acquire the real property presently owned by APPCO simultaneous with Titan's closing. Additional information detailing the transaction will be provided prior to that date. The anticipated sale-leaseback transaction of Appco's real estate has been structured to deleverage Titan's acquisition of Appco.
"We look forward to closing our acquisition of Appco," said Bryan Chance, Chief Executive Officer of Titan Global Holdings. "Appco is an ideal first acquisition for our recently formed Titan Energy Group which is dedicated to acquiring energy assets with significant and immediate opportunities for revenue and earnings growth. We are looking forward to working closely with Appco's management team and providing them with the strategic and financial resources to exploit Appco's opportunities. Ultimately, each of these strategies supports our unwavering commitment to building shareholder value."
Titan's management anticipates Appco will generate record revenues in excess of $410 million with increased positive cash flow for the fiscal year ended September 30, 2007. Appco generated $403 million in revenue and was positive cash flow in its fiscal year 2006. Titan projects Appco will maintain or grow revenue from $410 million and generate stronger cash flow and margins for fiscal 2008 as it increases the distribution of biofuels through its established distribution channels. The extent of the improvement in Appco's cash flow and margins will be subject, among other things, to the availability and deployment of such biofuels which Titan's management is confident that it is poised to fully exploit.
Titan intends to further Appco's penetration into ethanol market through the distribution of biodiesel products. These strategies can increase Appco's margins while aiding in the protection and preservation of our environment.
Appco, formed in 1923 and based in Blountville, Tennessee, is a privately held petroleum company that owns and operates an extensive petroleum product distribution network. Appco distributes petroleum products to more than 160 dealers in the southeastern United States and owns and operates 56 convenience store locations. Appco has more than 550 employees and maintains long standing partnerships with strategic terminal operators and major oil companies.
"I have extensive experience in the real estate leaseback space," said David Marks, Chairman of Titan Global Holdings. "In an effort to deleverage the acquisition for Titan, I have structured a leaseback transaction with an institutional investor. We anticipate closing that transaction simultaneously with Titan's closing of Appco. In addition, we have arranged traditional debt financing with Greystone Business Credit to facilitate Titan's acquisition and working capital funding of Appco."
"Appco and its talented management provide Titan with a solid foundation for its entrance to the energy sector," said Scott Hensell, Chief Financial Officer of Titan Global Holdings. "With this foundation we will expand biofuels into its retail and wholesale distribution channels, growing revenue, margins and EBIDTA. In the next month we will update our consolidated revenue and EBIDTA guidance for our fiscal 2008."
About Titan Global Holdings
Titan Global Holdings, Inc. ("Titan") (OTCBB:TTGL) is a high-growth diversified holding company with a dynamic portfolio of companies engaged in emerging telecommunications markets, advanced technologies and energy. In its last fiscal year Titan generated in excess of $109 million in revenues on a consolidated basis.
Titan's Oblio Telecom Inc. ("Oblio") telecommunications subsidiary, based in Richardson, Texas, is a market leader in prepaid telecommunications products and the second largest publicly-owned international telecommunications company focused on the prepaid space. Oblio leverages strategic agreements with Tier 1 telecommunications leaders Sprint and Level3 to supply its brand-name prepaid calling cards. Annually Oblio sells an estimated 35 million of its brand-name prepaid calling cards through its established distribution channels estimated at more than 60,000 retail outlets.
Titan Wireless, Inc. ("T Wireless") is Titan's wireless subsidiary and is a mobile virtual network operator ("MVNO"). T Wireless sells its MVNO prepaid wireless products and wireless services through Oblio's established distribution channels. Titan's Electronics and Homeland Security division specializes in advanced manufacturing processes to provide commercial production runs and quick-turn delivery of printed circuit board prototypes for high-margin markets including Homeland Security and high-tech clients.
For more information, please visit: www.titanglobalholdings.com. For investor-specific information and resources, visit http://www.trilogy-capital.com/tcp/titan/ or http://www.b2i.us/irpass.asp?BzID=1314&to=ea&s=0. To view current stock quotes and news, visit http://www.trilogy-capital.com/tcp/titan/quote.html. To view an investor fact sheet about the company, visit http://www.trilogy-capital.com/tcp/titan/factsheet.html.
Forward-Looking Statements
Safe Harbor Statement Under the Private Securities Litigation Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of TTGL could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rate and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.
