Magnegas Applied Tchnlgy Sltns Inc (NASDAQ:MNGA) is in an acquisition spree that is already translating into increased sales. The company reported a record $0.9 million in sales for the month of September, an estimated 260% increase from the same month’s sales last year.
MagneGas Expansion strategy
The increased sales can be attributed to the company’s expansion program through acquisition. Since the first quarter of 2018, MagneGas has acquired previously independent firms in the states of California, Texas and Louisiana. With the company now covering large grounds it is only normal that its sales are surging as a result.
MagneGas is concluding its second acquisition for a Texas-based firm, a deal that was bargained for $1.25 million cash payment. Speaking about the acquisition, Ermanno Santilli, Chief Executive Officer of MagneGas said that “Texas is an extremely robust market for industrial gases, particularly metal cutting fuels. Acquiring many new customers in a large batch that we can systematically convert to MagneGas2® is a powerful competitive advantage.”
2019 Growth strategy
The executive further stated that the acquisition was in line with the company’s 2019 growth strategy that seeks to leverage on these kinds of expansion strategies coupled with the company’s “superior product quality” to achieve a huge customer base that will obviously translate to increased company sales.
The company made its debut in Texas with Green Arc Supply’s acquisition in the beginning of this year for $2.5 million. The acquisition details included a $1 million payment in cash with the balance to be settled in “restricted common stock.”
The company also prides a productive sales team that is steadily getting the company new clients. The company’s CEO acknowledges that its California sales team is slowly converting to the company clients in the California’s cannabis market. The Texas team’s efforts in fighting off rivals of the company’s new acquisition, Green Arc Supply are succeeding.
In other news, the company’s equities were souring as investors probably scrambled to get a piece of the greatly performing company. It is clear that the company’s growth strategies are working and that should the trend continue, MagneGas is gearing to a very profitable run going forward.