Enservco Announces Agreement to Acquire Accretive Energy Logistics Business to Diversify the Company - Seite 2

MANAGEMENT COMMENTARY

Richard A. (“Rich”) Murphy, Chairman and CEO of Enservco, commented, “We are excited to announce this agreement to acquire an immediately accretive logistics business that will transform Enservco. We look forward to working closely with Buckshot owners Tony and Jim and their dedicated team to drive further expansion and execute on the synergies available from our collective asset and customer bases. Buckshot provides a strong complement to our current service offerings with the added benefit of not being winter weather dependent. Buckshot will also provide a substantial improvement in operational and financial visibility, which benefits our business, shareholders, and other stakeholders.”

Tony Sims, Founder of Buckshot Trucking LLC, commented, “We are excited about the opportunity to combine with Enservco. In addition to our identified list of potential expansion targets in current markets, we look forward to expanding our business into other areas based on Enservco’s extensive operational footprint and customer base.”

Mr. Murphy, concluded, “Today’s announcement is timely as we recently gave an operations update disclosing our improved operational performance in 2023 and encouraging start to 2024. Adding Buckshot to our portfolio is expected to substantially improve financial results for 2024 and support further improvement and growth in subsequent years. We look forward to reporting fourth quarter and full year results for 2023 later this month and providing additional updates. Most important, we appreciate our shareholders’ continued support as we further transform the organization to drive long-term growth.”

ADDITIONAL TRANSACTION DETAILS

The initial consideration is $5.0 million, including $3.75 million of cash to be paid at closing and $1.25 million of ENSV common stock, with the stock price based on the 10-day period immediately preceding the Closing Date. As part of the Transaction, the principals at Buckshot have the opportunity for an additional potential performance payout of up to $0.5 million based on growth and financial performance relative to the performance of Enservco’s stock.

The Transaction is expected to close in the second quarter, subject to approval by Enservco stockholders. To fund the $3.75 million of cash to paid at the Transaction’s closing, Enservco must raise additional capital either through the equity and/or debt markets.

FURTHER INFORMATION

Enservco will post to its website an updated Company presentation by Tuesday, March 26, as well as a webcast with Rich Murphy and other executives discussing the Transaction and the Company’s outlook.