WOODCLIFF LAKE, N.J. - Hudson (NYSE:HUD) Technologies, Inc. (NASDAQ: HDSN) has announced its acquisition of the assets of refrigerant distributor USA United Suppliers of America, also known as USA Refrigerants, for a total of $20.7 million, with the potential for an additional $2 million in earnout payments. This strategic move, announced today, is expected to enhance Hudson's capabilities in sourcing recovered and reclaimed refrigerants.
USA Refrigerants has been a significant player in the industry for over 25 years, specializing in the distribution of refrigerants and the recovery of reclaimed gases. Hudson Technologies aims to leverage USA Refrigerants' established sales network and customer base to improve its purchasing power of recovered refrigerants. This acquisition aligns with Hudson's valuation target, pegged at 6X EBITDA.
Brian F. Coleman, President and CEO of Hudson, expressed confidence that the integration of the USA team will bolster Hudson's dedicated refrigerant acquisition group. The group's focus will be on acquiring a broad range of refrigerants, from CFCs to HFCs and newer generation products. Coleman anticipates that this expansion will drive sales of higher-margin refrigerants, especially as the market adjusts to the phase-down of virgin refrigerants.
Ted Broudy, President of USA, echoed Coleman's sentiments, highlighting the benefits for USA's customers who will now have access to Hudson's resources and expertise. The collaboration is expected to extend the reach of their services to a wider customer base.
Hudson Technologies is recognized for its innovative and sustainable refrigerant products and services provided to the HVAC and refrigeration industry.
This transaction is based on a press release statement.
In other recent news, Hudson Technologies reported a decline in its first-quarter 2024 revenues, which fell to $65.3 million, a 15% drop compared to the same period in 2023. The company attributed this decrease to lower refrigerant prices and reduced revenue from its Defense Logistics Agency contract.
Despite these challenges, Hudson Technologies remains optimistic about future increases in refrigerant sales prices and the long-term benefits of the American Innovation and Manufacturing Act.
In a separate development, Hudson Technologies announced a licensing agreement with The Chemours Company (NYSE:CC). This deal enables Hudson to market its reclaimed refrigerants using the well-known Freon™ brand name. Under the terms of the agreement, Hudson Technologies will have the rights to sell its reclaimed refrigerants under the Freon™ R-11, R-12, R-123, and R-22 labels.
The company continues to explore growth through potential acquisitions and benefits from the phasedown of HFC consumption. Despite current market conditions, Hudson Technologies maintains a positive long-term perspective, looking forward to higher sales prices and profitability as the American Innovation and Manufacturing Act progresses.
InvestingPro Insights
As Hudson Technologies (NASDAQ: HDSN) takes a significant step forward with the acquisition of USA Refrigerants, the financial metrics and expert analysis provided by InvestingPro offer a deeper understanding of the company's position. With a market capitalization of $413.69 million and a favorable price-to-earnings (P/E) ratio of 8.94 for the last twelve months as of Q1 2024, Hudson appears to be trading at a low earnings multiple, which could indicate an attractive valuation for investors.
The company's financial health is further underscored by an InvestingPro Tip highlighting that Hudson holds more cash than debt on its balance sheet, suggesting a strong liquidity position that could support its strategic acquisitions and operations. Additionally, Hudson has a high shareholder yield, which could be appealing to investors looking for returns.
Despite the challenges in the market, as reflected by a 12.89% decline in revenue over the last twelve months as of Q1 2024, Hudson Technologies has been profitable over the last twelve months, according to another InvestingPro Tip. This resilience in profitability, coupled with the company's strategic moves to enhance its capabilities, places it in a potentially advantageous position as it navigates the evolving refrigerant industry.
Investors interested in gaining more insights can explore the full list of 12 additional InvestingPro Tips available for Hudson Technologies at https://www.investing.com/pro/HDSN. For those looking to delve deeper, using the coupon code PRONEWS24 will grant an extra 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to valuable investment analysis and data to inform their decisions.
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