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Publish Date : 29-Sep-2017

MagneGas Corporation ("MagneGas" or the "Company"), a leading clean technology company in the renewable resources and environmental solutions industries, announced today that the Company entered into a Letter of Intent to acquire a San Diego-based independent industrial gas and welding supply business expected to generate over $1.0 million in annualized revenues for 2017. This acquisition would represent a 28% increase in MagneGas revenues compared to the Company's 2016 revenues. The upfront cash consideration for the transaction is $750,000. The Company expects to close the transaction by October 31, 2017.

Ermanno Santilli, Chief Executive Officer of MagneGas, stated, "We've been successful in integrating our first industrial gas distributor, ESSI, growing it rapidly at a rate far higher than the industry average which has validated our strategy of expanding our footprint through acquisitions. We are looking to continue that momentum by acquiring additional companies with a strong customer base where we can leverage management to establish our presences and then organically grow our sales in new markets using MagneGas2 as a door opener coupled with our excellent customer service. We then plan to sell ancillary high margin products consistent with our new strategy which is a solid first step for MagneGas as we look to accelerate our growth through acquisitions."

"We believe that the San Diego acquisition meets all of our criteria which is a strong stable management, customer diversification, profitability and scalability, and also fits well with additional high value customers such as military and civilian shipyards. California is a key market for MagneGas. It is one of the strongest adopters of clean technology, and the state is very supportive of environmentally friendly commercial technologies making it perfect to leverage our unique MagneGas2 product. In fact, we are already in the advanced stages of negotiating a very significant MagneGas2 customer with a multi-year commitment that would immediately benefit from this potentially new sales branch in San Diego. We are eager to complete this transaction and successfully execute more transactions along the West Coast in the near term."

"We are very optimistic about our plans to expand through acquisition. Our Florida operations are growing at almost 20 times the normal industry growth rate which is attributable to our MagneGas2 product and excellent customer service," commented Scott Mahoney, Chief Financial Officer of MagneGas. "California and Texas are two of the largest markets in the US for industrial gas and welding supplies. Starting with this acquisition, we anticipate we will execute additional acquisition like this in the near term in these core industrial markets. We are being extremely disciplined in our due diligence, sourcing well run, stable, profitable companies where we can partner to accelerate their growth in world class industrial markets. We believe this has the opportunity to generate strong financial results and sustained shareholder value in the near term."

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