OSCEOLA, AR - Envirotech Vehicles, Inc. (NASDAQ:EVTV), a technology firm specializing in electric commercial vehicles, has announced the acquisition of Maddox Industries, a leading provider of government contracting solutions based in Puerto Rico. The partnership is expected to expand Envirotech's U.S. manufacturing and logistics capabilities, providing a significant revenue stream from government contracts over the next three years and generating job opportunities in the United States.
Phil Oldridge, CEO of Envirotech, highlighted the acquisition's immediate benefits, stating that Maddox Industries will contribute to a stable and considerable revenue flow, improving the company's financial standing. Maddox's expertise in electric vehicle transportation, ranging from military vehicles to school buses, aligns with the increasing demand in the electric vehicle market. The acquisition is also anticipated to yield employment tax credits as Envirotech expands its workforce.
Maddox Industries has a history of managing large-scale government contracts, having supported over a billion dollars in U.S. government contracts for prime defense contractors. The acquisition includes a three-year manufacturing agreement to be executed at Envirotech's 580,000 square-foot facility in Osceola, Arkansas, which is expected to create over 250 jobs in the area.
Jason Maddox, founder of Maddox Industries, expressed his enthusiasm for the partnership, which will leverage Envirotech's vehicle technology and manufacturing logistics. The collaboration will focus on developing products for the first responder market, including electric ambulances and police vehicles, and promoting energy-efficient school buses.
The acquisition will also enhance Maddox's logistics contracts and facilitate operational testing of battery-powered heavy lift drones for defense, logistics, and agriculture purposes. The strategic location of Envirotech's facility, with access to rail, highway, and barge transport, will enable expedited delivery to government stockpiles.
Maddox further noted the complementary nature of Envirotech's electric vehicle technology, battery systems, and EV charging networks, which together will support initiatives like the U.S. Postal Service's goal of deploying zero-emission logistics vans and the Humvee hybrid modernization program.
The transaction terms include issuing 3,100,000 shares of common stock to the owner of Maddox Industries and a conditional cash payment of $1,000,000 upon the collection of Maddox's outstanding accounts receivables within 180 days post-closing.
This development reinforces Envirotech's commitment to sustainable growth and positions the company as a leader in environmentally friendly solutions for the government, agriculture, and logistics sectors. The acquisition is based on a press release statement and further details can be found in Envirotech's SEC Form 8-K filing this week.
In other recent news, Envirotech Vehicles has undergone several significant changes. The company has announced the appointment of Jason Maddox as President and Elgin Tracy as Chief Operating Officer, both bringing extensive experience from their previous roles at Maddox Defense, Inc. However, Susan M. Emry has resigned from her roles as Executive Vice President and Corporate Secretary, with no details on her successor or transition plan yet announced.
Envirotech has also completed a private placement of equity securities, raising gross proceeds of $750,000 through the sale of 451,806 shares of common stock and warrants for an additional 451,806 shares. Cryptocurrency pioneer Brock Pierce has been welcomed to the Envirotech board, a move expected to bring strategic insights and potential investment opportunities.
In terms of operations, Envirotech has sold 25 "Bumble Bee" model electric school buses across Arkansas and Texas and added seven new hires to the team. The company has also secured a $16.2 million deal with Texas-based PlugD Commercial Electric Leasing and Rentals Inc. for the supply of 200 electric high-roof vans and trucks. Furthermore, Envirotech obtained $4.3 million in binding purchase orders for 43 vehicles from 19 customers, backed by New Jersey's Zero Emission Incentive Program. These recent developments reflect Envirotech's ongoing efforts to expand its presence in the electric vehicle market.
InvestingPro Insights
Envirotech Vehicles' acquisition of Maddox Industries marks a significant step in the company's growth strategy, potentially addressing some of the financial challenges highlighted by recent InvestingPro data. While the company's revenue for the last twelve months as of Q2 2023 stood at a modest $1.83 million with a concerning revenue decline of 67.11%, the Maddox acquisition is poised to inject a substantial and stable revenue stream from government contracts over the next three years.
This strategic move aligns with an InvestingPro Tip indicating that net income is expected to grow this year. The anticipated revenue boost from Maddox's government contracts could be a key driver in achieving this growth. Additionally, another InvestingPro Tip suggests that analysts predict the company will be profitable this year, which could be supported by the synergies and expanded capabilities resulting from this acquisition.
The company's current market capitalization of $29.75 million reflects its status as a niche player in the electric vehicle industry, as noted by another InvestingPro Tip. However, the acquisition of Maddox Industries and the subsequent expansion into government contracting could potentially lead to a re-evaluation of Envirotech's market position and valuation.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into Envirotech Vehicles' financial health and future prospects.
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