ADVANCED EMISSIONS (OTCMKTS:ADES) board of directors has decided to look into separating its refined-coal operations from its emissions controls business. They will investigate the financial and strategic opportunities and maximize shareholder value. The company is looking to focus its efforts and streamline the operations. Clean Coal Solutions LLC is the coal business and it is possible it will be spun-off as a separate entity. This would create two independent and publicly traded companies. Shareholders of record would receive shares in the new company bringing added value to their current positions.
Why is momentum shifting in ADES? Read this analyst breakdown.
Strategic Positioning
The coal business doesn’t give synergy to the two operations as the material is not viewed as earth-friendly, unlike its emissions controls division. The branding doesn’t fit and by splitting the two companies can address their particular markets more effectively. There are still many issues to be addressed before the split can be done including tax concerns and SEC regulations. ADVANCED EMISSIONS (OTCMKTS:ADES) is also hoping this allows them to fluently become compliant with reporting requirements. They are hoping to complete the split by early 2016.
Family Affair
The holding company for ADES family is the Advanced Emissions Solutions unit (ADES). ADA-ES is the company’s distributor for its Activated Carbon Injection systems. The systems control mercury and DSI systems for acid gases. Its focuses on providing support for its customer’s emission compliance needs. Clean Coal Solutions is 42% owned by ADA and provides patented technologies that reduce emissions and mercury releases. Lastly, the company owns BSCI LLC which is a custom designer and builder of engineered emission solutions. They serve industrial clients and offer a large variety of solutions for acid gas controls. ADVANCED EMISSIONS (OTCMKTS:ADES) is looking to streamline these entities and bring focus to its business model.
Technicals
The chart has taken some damage as the company delisted and lost some data. It is trading close to where it was before the event and should resume sideways action from here. The resistance is at $18.09 and until that is taken out the stock will stay stagnant.
