DALLAS -- Titan Global Holdings Inc. said it and NewGen Technologies have completed a definitive biofuels supply agreement that will become effective upon Titan's acquisition of Appalachian Oil Co. (Appco), which is scheduled for today, Sept. 12, 2007.
Titan recently formed Titan Global Energy, a division engaged in the acquisition and management of complementary energy sector assets. Titan Energy has and will capitalize on initiatives within the energy sector that can provide opportunities for revenue and earnings growth. Appco is the first acquisition [image-nocss] of Titan Energy, which will seek future acquisitions to compliment Appco's existing retail and wholesale distribution footprint.
Last week, Titan issued revenue guidance for fiscal 2008. Titan Global Energy is expected to contribute $433 million to Titan's stated overall revenue guidance of $747 million for fiscal 2008.
Under the agreement with NewGen, ReFuel America Inc., a wholly owned subsidiary of NewGen, will be a supplier of biofuels for Appco. The term of agreement is 10 years with the right to supply biofuel products to Appco at the prevailing market price for such biofuel products at the time an order is placed.
Appco, formed in 1923 and based in Blountville, Tenn., is a privately held petroleum company that owns and operates an extensive petroleum product distribution network that generated $403 million in revenues for fiscal 2006. 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 longstanding partnerships with strategic terminal operators and major oil companies.
The access to these additional sources of biofuels will help us lead Appco's markets in the distribution of such products, said David Marks, chairman of Titan Global Holdings. This agreement leverages our financial and management strength with the biofuel know-how of NewGen.
Bryan Chance, CEO of Titan Global Holdings, said, Titan's senior management is committed to the utilization of Appco's extensive distribution channels into 55 retail and 165 dealer accounts to distribute environmentally friendly biofuels while earning higher profit margins. These additional supply sources will enable us to increase revenues and earnings in the energy sector. As well, we will continue to search for strategic opportunities in the dynamic energy sector.
Appco's revenue base provides Titan with an ideal platform company for further expansion of its energy efforts, it said. Appco's management team has more than 125 combined years of experience in the petroleum and c-store industry. Titan will preserve and leverage Appco's management team.
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