Safe and Green Development Corporation (NASDAQ: SGD) (“SGD” or the “Company“), a real estate development and innovation company, is announcing that it has entered into a definitive agreement to acquire 100% of the equity interests in Resource Group US Holdings LLC (“RSG” or “Resource Group”) (https://www.resourcegroupus.com/) for $480,000 in cash, the issuance of 19% shares of SGD Restricted Common Stock at Closing and a Convertible Note in an amount to be determined at Closing, convertible into shares of SGD Restricted Common Stock subject to the receipt of SGD Shareholder Approval Post-Closing in accordance with Nasdaq rules. The transaction is expected to close early in the Second Quarter of 2025 subject to customary closing conditions and the completion of RSG’s audit. The shares of SGD Restricted Common Stock to be issued at Closing and additional shares of SGD restricted common stock to be issuable under the Convertible Note will together equal 49% of SGD’s outstanding shares of Common Stock at Closing. The SG DevCo Board of Directors unanimously approved this transaction after reviewing a fairness opinion, internal and third party buy-side due diligence and a GAAP review of financials. The acquisition is expected to add significant cashflow from Resource Group’s waste-to-value composting business.
A message from CEO, David Villarreal:
“In an effort to ensure the long-term success of the Company, we have spent a significant amount of time streamlining our operations and identifying suitable targets to maximize shareholder value. We have evaluated several prospects and ultimately have negotiated what we believe is a transaction that brings substantial value to the existing SG DevCo shareholders in both the short and long term. This transaction will help transform the Company’s financial profile by strengthening the balance sheet and adding significant revenues. This strategic acquisition should drive value by focusing on and expanding the waste-to-value composting business using Resource Group’s proprietary technology. We have determined that Resource Group has a competitive advantage in a growing market that will set the foundation for strong and rapid growth in the coming years. We are excited by the prospect of this transaction and are looking forward to working with Resource Group’s team to scale the business and increase cash flow to create substantial value for the shareholders.”
Resource Group
RSG is a next-generation, full-service organic recycling and compost technology company specializing in transforming targeted organic green waste materials into engineered, environmentally friendly soil and mulch products. These sustainable solutions replace costly and environmentally harmful fertilizers, supporting greener practices across industries. With an established facility for aggregating organic landscape debris, Resource Group offers year-round collection and disposal services through high-capacity grapple trucks, open-top walking floor trailers, and variable-sized containers serving green waste generators, landscaping companies, golf courses, communities, and municipalities. Resource Group works to streamline operations by internalizing transportation services, reducing over-the-road mileage, lowering disposal costs, and maximizing efficiency. Through its commitment to Closed-Loop and Zero-Landfill Solutions, Resource Group seeks to deliver both economic and environmental value to its customers.
- Market Size: The global compost-to-substrate market is valued at approximately $10B, driven by demand from horticulture sectors.
- Intellectual Property: Resource Group maintains an exclusive license for the use of Microtec technology for biomass applications in North America, appraised by a third party valued at $10.5 million.
- Myakka Site: The site on which the composting operations currently sit in Myakka City, FL has been appraised at $12.75 million.
- Contracts with Customers: The logistics subsidiary of Resource Group has contracts with customers that amount to $10.7 million in aggregate potential revenue.
- Engineered Soil MOU’s: Signed MOUs project incremental revenues that are not part of the current revenues from various product categories, including compost, premium blended products, and woody materials.
- Competitive Advantages:
- Cost Efficiency: RSG’s production costs using the Microtec technology are significantly lower than traditional media feedstock costs, creating significant savings for end users while maintaining high-quality products.
- Innovative Technology: Microtec’s proprietary kinetic/convection grinding system reduces energy requirements, optimizes nutrient retention, and creates a high-quality, expanded volume product.
- Sustainability: Operations focus on green waste aggregation, nutrient shifting, and non-forestry-derived feedstocks, providing environmentally friendly and economically viable solutions.
- Logistics and Scalability:
- Established Infrastructure: RGS operates a permitted compost facility in Myakka City, FL, supported by 23 tractors and 82 walking-floor trailers for transportation.
- Green Waste Aggregation Sites: Two green waste aggregation sites streamline operations and secure 30-40% of inbound feedstock for the Myakka facility.
- Demand Drivers:
- ESG Goals: Increasing corporate commitments to carbon reduction and green solutions are expected to enhance market opportunities.
- Rising Input Costs: Potting and growing media prices have reached record highs, with fertilizer components up 30% alone in 2022, after being up nearly 80% in 2021 (World Bank).
“At Resource Group US, we are seeking to redefine what it means to transform waste into value. By integrating cutting-edge technology with sustainable practices, we aim to not only meet the growing demand for greener solutions but also create substantial economic and environmental benefits for our communities. Our mission is to deliver innovative products that align with both industry needs and global sustainability goals,” stated Anthony M. Cialone, CEO, Resource Group
Index Investment Group (“Index”)
The transaction will result in Index Investment Group becoming a significant shareholder of SGD as co-founder of Index, Bjarne Borg, will join the SGD Board of Directors upon closing. The addition of a strategic shareholder will be a milestone for the Company as it looks to broaden its shareholder base. Index Investment Group has made significant investments in real estate and renewable energy. The real estate arm spans residential, commercial, and industrial assets in the United States, Canada, and Sweden while the investments in renewable energy, particularly deep-sea offshore wind and biomass energy power plants, are expected to yield over 20 GW gross output of green energy in the when fully operational. Index Investment Group, headquartered in Jupiter, FL, has been involved in over thirty developments across North America, with a focus on Florida since 2011. Additionally, Index owns nearly 3 million square feet of commercial-industrial properties in the upstate New York market. Borg currently holds leadership positions as the Executive Chairman of the Board of Index Investment Group, chairman of the board of publicly traded Hexicon Group, and advisory board roles in several regional banks.
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