ATWEC Technologies Inc. (OTC: ATWT) Stock Takes a Hit: Here is Why

Things didn’t end well for ATWEC Technologies Inc. (OTC: ATWT) shareholders, as the stock went through a selloff last Friday and ended up with a decline of 20%. However, investors would be keen to see if there’s any recovery this week.

The Big Reveal

Last Thursday, the company announced that it inked a non-binding letter of intent to acquire Tulsa-based excavation services provider Prograde Excavating. In the news release, it was noted that Prograde was a specialist in land clearing, residential excavation, demolition services, and commercial site development. More importantly, Prograde held considerable experience in providing best-in-class services to projects of all sizes.

The Rationale

ATWEC Technologies stated in the news release that the acquisition of the well-known excavation company was synergistic in nature, especially because of the company’s modern home building offerings in the Sunbelt region. AWTEC would also benefit from Prograde’s experience in excavation services, and the acquisition would also enable it to integrate commercial and residential development services in multiple markets.

The acquisition would also add $2 million in yearly recurring revenues to ATWEC Technologies’ bottom line and an existing list of commercial and residential developers as clients. ATWEC Technologies would complete a 100% acquisition of Prograde, and the transaction is expected to be concluded at some point in the fourth fiscal quarter of 2024.

Key Quote

“This acquisition of an established excavation contractor in a growth market is highly synergistic with our modern home building solutions in the Sunbelt region,” said Josh Ploch, Chief Executive Officer of The Birch Co. “We will build on the company’s achievements, enabling us to vertically integrate our residential and commercial development capabilities into other markets. The acquisition will also facilitate expansion of our customer base into demolition and land clearing verticals that we are not servicing today.

Technicals

+/- EMA(20)	0.0013 (-7.69%)
+/- SMA(50)	0.0015 (-20.00%)
+/- SMA(200)	0.0015 (-20.00%)