AERC - AeroClean Technologies to merge with Molekule in all-stock deal

AeroClean Technologies ( NASDAQ: AERC ) said Monday it will merge with Molekule , an air purifier maker, in an all-stock deal.

AERC said the combined firm will have the largest range of patented, FDA-cleared air purification devices.

The combined company is expected to generate ~$45M revenue in FY22 on a pro forma combined basis and is expected to have a solid balance sheet with a strong liquidity profile.

The firm is projected to see double-digit organic revenue growth, with gross profit expected to grow faster than revenues due to expanding gross margins.

AERC shareholders will own 50.5% of the combined firm on a pro forma basis and Molekule stockholders will own 49.5%. AERC will change its name and ticker to Molekule and "MKUL" once the deal closes.

"... the combined company will generate significant, organic revenue growth particularly in the B2B channel as we begin the roll out SaaS IAQ solutions... we expect to be well-positioned to pursue additional strategic acquisitions," said AERC chairman Amin Khoury.

On an estimated pro forma combined basis as of Sept. 30, the combined firm would have had ~$30M in cash and long-term debt of ~$37M, which is interest-only through Apr. 2024 and amortizing through Apr. 2027.

Khoury has been named non-executive chairman at the combined firm. AERC's CEO Jason DiBona and CFO Ryan Tyler will remain in these roles at the combined firm, while Molekule's CEO Jonathan Harris will transition to chief commercial officer.

AERC's boards will be expanded to seven members.

The combined firm will remain headquartered in Palm Beach Gardens, Florida, with significant operations in Lakeland, Florida and offices in San Francisco, California.

The merger is expected to close early in H1 2023.

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