American Resources Corporation AREC, through its majority-owned subsidiary, Electrified Materials Corporation (“EMCO”), recently entered into a binding Letter of Intent to acquire 100% of Blackion LLC in an all-stock transaction valued at approximately $13.2 million.
The deal values EMCO at an agreed $275 million pre-money valuation and is structured with 50% of the consideration payable at closing, 25% after 12 months and the remaining 25% after 24 months, subject to strategic alignment and integration objectives. The transaction remains subject to definitive agreements, customary closing conditions and required approvals.
Blackion provides lithium-ion battery lifecycle and critical materials solutions, with capabilities in feedstock origination, reverse logistics, battery lifecycle management, material recovery and closed-loop supply chains. Its commercial relationships and battery supply-chain expertise are expected to strengthen EMCO's ability to source and process battery materials at scale.
The acquisition is expected to accelerate EMCO's commercialization by adding Blackion's management team, commercial relationships and operating capabilities. The combined platform will focus on LFP batteries, manufacturing scrap, black mass, other battery-derived feedstocks and rare earth magnet materials.
EMCO also plans to connect its front-end material aggregation and processing activities with ReElement Technologies' advanced refining capabilities, creating a more integrated pathway from feedstock sourcing through critical mineral recovery and refining.
Price Performance of AREC
Shares of AREC are down 36.8% over the past year compared with the industry’s 25.9% rise.
AREC’s Zacks Rank & Other Key Picks
AREC carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Basic Materials space include Ternium S.A. TX, Innospec Inc. IOSP and Avient Corporation AVNT. TX currently sports a Zacks Rank #1 (Strong Buy), while IOSP and AVNT carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TX’s current-year earnings is $6.54 per share, implying a 201.4% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 11.1%.
The Zacks Consensus Estimate for IOSP’s fiscal current-year earnings is pegged at $5.03 per share, implying a 4.55% year-over-year decrease. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 12.9%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%.
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American Resources Corporation (AREC): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).