American Resources Corporation (NASDAQ:AREC) announced that the special purpose acquisition (SPAC) vehicle it sponsored has entered a merger agreement with a next-generation royalty company that will result in the combined company listing on Nasdaq.
The deal will see American Acquisition Opportunity Inc (AMAO) merge with Royalty Management Corp and take the name Royalty Management Company. The resulting company will continue to be based in Fishers, Indiana.
The combination values RMC at an implied $111 million pro forma enterprise value, at a price of $10 per share, assuming no redemptions by AMAO shareholders, the company said. Both boards of directors have approved the deal, which is expected to occur in the fourth quarter of 2022.
The transaction will result in gross proceeds of approximately $16 million to RMC, also assuming no redemptions by AMAO stockholders and prior to the payment of transaction expenses.
READ: American Resources completes first phase of commissioning its rare earth and battery materials facility in Indiana
"Our focus for AMAO was to partner with a dynamic cash-flowing company that didn't require a complicated or highly dilutive financing as part of the de-SPAC process in order to thrive on its own as a public company,” AMAO CEO Mark Jensen said in a statement.
“We also wanted to invest in a company that understood the importance of generating strong returns in today's market without the immediate need for raising capital while also having a vision on how to grow the business in line with how the economy and world markets are trending. RMC fits this mold with how it is transforming the royalty industry, focusing on current cash flow while creating a broad funnel of future long-term royalty streams in transitionary industries," Jensen added.
RMC and AMAO plan to host a joint investor conference call at 10.30am ET on July 7, 2022, to discuss the proposed transaction. Interested parties can dial 1-877-407-4019 in the US.
American Resources is a next-generation, environmentally and socially responsible supplier of high-quality raw materials to the new infrastructure market. It has a growing portfolio of operations located in the Central Appalachian basin of eastern Kentucky and southern West Virginia, where premium quality metallurgical carbon and rare earth mineral deposits are concentrated.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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