Mathieu Martin |

Espace MicroCaps Top Picks: Xebec Adsorption

Ticker symbol: XBC.V

Share price: $0.72

Shares outstanding / fully diluted: 57.02M / 71.67M*

Market Cap: $41.1M

Debt: $5.98M**

Cash: $7.52M*

Fully diluted Enterprise Value: $44.5M



* Pro-forma, taking into account the recent issuance of 9,439,966 shares at $0.75 for net proceeds of $6.66M.

** Excluding the convertible debenture that is currently in the money. The debenture is included in the fully diluted share count and enterprise value.

 Company overview

Xebec Adsorption Inc. is a global provider of gas generation, purification and filtration solutions for the industrial, energy and renewables marketplace. Its 1,500+ worldwide customers range from small to multi-national corporations and governments looking to reduce their carbon footprints. Headquartered in Montreal (QC), Xebec designs, engineers and manufactures innovative products and technology solutions that transform raw gases into marketable sources of clean energy for industrial use, transportation, gas utilities and the public sector. Xebec has two manufacturing facilities in Montreal and Shanghai, as well as a sales and distribution network in North America, Europe and Asia. It operates into three distinct business segments:

  1. Clean Technology – Renewable Natural Gas and Hydrogen

This segment consists in the engineering and sale of systems/plants to produce fuel for a wide variety of applications, from fuel cells to the replacement of fossil fuels in transportation. This segment is benefiting from strong tailwinds in many countries due to the transition to a low-carbon, low-pollution and resource-efficient economy.

  1. Renewable Gas Generation

This is a new model that the company is currently developing in Canada. There are currently no major developers of renewable natural gas projects in Canada, so management decided to build, own and operate its own projects. These are long-term projects that will generate strong and stable cash flows by producing low-carbon renewable fuel and selling it to gas utilities.

  1. Industrial Air & Gas products

Industrial purification equipment, parts and services for applications as diverse as manufacturing, food processing, medical and petrochemical industries. This equipment requires on-going parts and services, which provide Xebec with significant recurring revenues from its 9,000 existing industrial product installations to date.


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