A news release from Advanced Emissions Solutions reveals that it has signed a 15-year master supply agreement with Cabot Corporation subsidiary Cabot Norit America. The deal has it supplying the company with activated carbon products.
Advanced Emissions Solutions notes that this will have it acting as the sole supplier of lignite-based activated carbon products to Cabot Norit America. The deal also has the company taking over the Cabot’s lignite mine that supplies its facility on Marshall, Texas.
The Advanced Emissions Solutions news release says that these changes will result in incremental increases over the next four or five quarters. That includes annual revenue growth between 30% and 40%, annual EBITDA growth of $10 million to $15 million, as well as reducing power generation exposure to below 50% of its product portfolio.
Greg Marken, the interim CEO of Advanced Emissions Solutions, said this about the Cabot Corporation news.
“The Agreement with Cabot allows us to secure material incremental volume and better capture the low-cost manufacturing capabilities of our Red River plant. It also allows us to expand our product portfolio beyond our current suite of products and capabilities, and provides entry into new and diverse markets. The completion of this Agreement is a testament to the premier quality of the activated carbon assets we possess, and it serves as a high-quality example of promising opportunities we have to grow our activated carbon business across a diverse set of applications.”
ADES stock was up 24.9% as of Thursday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.