Canadian energy company acquires Kremmling pellet plant
KREMMLING – Confluence Energy recently announced plans to merge with Canadian-based alternative energy company Viridis Energy Inc.
Viridis is a publicly traded company specializing in agricultural and wood waste biomass. Headquartered in Vancouver, B.C., Canada, Viridis operates Cypress Pacific Marketing and Okanagan Pellet Company, two firms in the wood pellet sector.
Kremmling-based Confluence Energy has one of the largest wood pellet plants in the western United States, with a capacity of 80,000 tons (expandable to 125,000 tons) per year of packaged wood pellet,. It manufactures its wood pellets utilizing the region’s abundant resource of pine beetle kill wood.
“We evaluated several U.S. and Canadian plants for this stage of our development and selected Confluence as the best synergistic fit from the standpoint of consistent quality of product, customers and footprint,” said Chris Robertson, chief executive officer of Viridis Energy. “With the Confluence acquisition, Viridis more than doubles its production capacity and expands its distribution reach to both the east and west coasts of the United States, providing a more efficient access to ports that serve international markets.”
Viridis entered March 3 into a letter of intent to acquire 100 percent of Confluence energy’s outstanding shares. The deal is expected to close by June.
Mark Mathis, founder and CEO of Confluence, said he’s been working with Viridis Energy in recent months to co-market products.
“We have a similar vision of where the industry is going,” Mathis said. “We both think consolidation is important and felt this alliance made sense. And, it’s been proven that we’ve been able to add volume to each other’s facilities with what we’ve done already.”
Viridis has hundreds of existing accounts, Mathis said: “They are exporting product, and we can backfill into the residential markets.”
Mathis said Confluence has been operating five days per week this winter and hasn’t had loads of product on the ground like last winter.
“Things have improved,” he said. “We were profitable last year and we have been profitable (so far) this year. … We are making traction on getting our past due accounts paid,” he added. “But, it’s still a tough market.”
Mathis said he thinks higher oil prices could push more people toward alternative energy next year and believes that if all goes well with the merger he will start running the plant 24/7 by the beginning of May.
“This will create the jobs and the economic development we’ve wanted this entire time. It’s really a benefit to everybody,” he said.
Mathis will continue to manage the Colorado operation and will assume a senior management role within Viridis upon the completion of the transaction.
“My job here won’t change much,” he said. “But I will have some new responsibilities.”
As part of the purchase deal, Viridis Energy will assume Confluence Energy’s debt and then Confluence will have to perform at certain levels to get payout, Mathis said.
Viridis will also invest some capital into the facility to help solve a few bottlenecks in production.
“Our mission is to aggressively expand our operations and achieve scale. 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,” Robertson said.
“I think it’s a great opportunity,” Mathis added. “Both pellet plants (in the region, including the plant in Walden) have been struggling. This gives us a leg up, allows us a better reach. We can apply some of the learnings (from Viridis), reduce cost and improve our footprints.”
Viridis intends to disclose more details about the transaction upon its completion.
For more information on Viridis Energy Inc., refer to the company website at http://www.viridisenergy.ca.
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