Duos Closes Asset Management Deal with Fortress Investment Group

Rhea-AI Summary

Duos Technologies Group (Nasdaq: DUOT) has finalized an Asset Management Agreement (AMA) through its subsidiary, Duos Energy , with Fortress Investment Group.

The deal, announced on November 20, 2024, involves managing a fleet of 30 mobile gas-powered turbines capable of generating 850 megawatts of power. These assets have been acquired by Fortress and will be managed in partnership with Duos. The agreement is valued at $42 million over two years, with Duos securing a 5% equity stake in the parent company owning the assets.

The turbines are immediately deployable and will address urgent energy demands for data centers and other critical sectors. This partnership aligns with Duos' strategic focus on providing scalable energy solutions to support infrastructure growth.

Duos' leadership, which includes former executives from APR Energy, will oversee the deployment and management of these assets. The company is in active discussions with U.S.-based data center developers and international energy projects for immediate turbine deployment.

CEO Chuck Ferry emphasized the importance of flexible and dependable energy solutions to meet evolving power needs.

Positive

• $42 million revenue over two years.
• 5% equity stake in the parent company owning the assets.
• Immediate deployability of 30 mobile gas-powered turbines.
• 850 megawatts of power capacity to meet urgent energy demands.

Negative

• None.

Insights

Financial Analyst

This landmark deal marks a strategic pivot for Duos, potentially transforming its revenue profile with an estimated $42 million over two years. The acquisition of a 5% equity stake in the asset-owning entity adds significant long-term value potential beyond the immediate revenue stream. The 850MW power generation capacity from 30 mobile gas turbines positions Duos strategically in the rapidly growing data center power solutions market.

The partnership with Fortress Investment Group, a $44.7 billion asset management powerhouse, brings substantial credibility and financial backing. The timing is particularly opportune given the explosive growth in data center demand, driven by AI computing needs and digital transformation. Mobile power solutions command premium pricing in this sector due to their rapid deployment capabilities and flexibility.

The deal structure suggests strong potential for margin expansion, as asset management fees typically carry higher margins than traditional technology services. For a company with a market cap of $57.3 million, this deal represents a transformative opportunity that could significantly impact both top-line growth and profitability metrics.

Energy Infrastructure Expert

The strategic value of this 850MW mobile gas turbine fleet extends beyond traditional power generation. These assets represent a critical solution for the data center industry's power infrastructure challenges, where traditional grid connections often can't keep pace with rapid deployment needs. The mobile nature of these units provides a significant competitive advantage, allowing for quick repositioning based on demand shifts.

The technology stack is particularly well-suited for data center applications, offering rapid deployment capabilities and the flexibility to scale power delivery. With data centers typically requiring 20-50MW each, this fleet could potentially support multiple major facilities simultaneously. The gas-powered nature of these units also offers a more environmentally favorable profile compared to diesel alternatives, while maintaining the reliability required for critical infrastructure.

Market Research Analyst

This deal positions Duos at the intersection of two high-growth markets: data center infrastructure and flexible power solutions. The global data center power market is projected to reach $15 billion by 2026, with temporary and flexible power solutions representing a fast-growing segment. The involvement of former APR Energy executives brings important operational expertise and industry relationships, potentially accelerating market penetration.

The timing aligns perfectly with the surge in data center construction driven by AI computing demands, which require 2-3 times more power than traditional data centers. This creates a significant market opportunity for flexible power solutions that can bridge the gap between immediate power needs and permanent infrastructure development. The deal structure, combining direct revenue with equity participation, provides both immediate cash flow and long-term upside potential.

Deal estimated at $42 Million revenue over two years and a 5% equity stake in the new venture

JACKSONVILLE, Fla., Jan. 06, 2025 (GLOBE NEWSWIRE) -- Duos Technologies Group, Inc. (“Duos” or the “Company”) (Nasdaq: DUOT), is excited to announce the successful closing of an Asset Management Agreement (“AMA”) through its operating subsidiary, Duos Energy Corporation. The AMA – announced on November 20, 2024 – encompasses the deployment and operation of a fleet of 30 mobile gas-powered turbines and associated balance-of-plant inventory (“the Assets”), collectively capable of generating 850 megawatts of power, which have been acquired by funds managed by affiliates of Fortress Investment Group (“Fortress”).

The assets will be managed in partnership with affiliates of Fortress, and are immediately deployable, providing a fast-track solution to meet the urgent energy demands of data centers and other industries. The transaction was finalized on December 31, 2024, following the fulfillment of customary closing conditions and regulatory approvals.

Fortress has entered into this strategic agreement with Duos Energy Corporation, whose leadership includes the former executive management team of APR Energy – from which the Assets were acquired. Duos Energy will oversee the management and deployment of the mobile gas-powered turbine fleet to meet growing energy demands across critical sectors, including Data Centers such as those deployed by subsidiary Duos Edge AI as well as emergency power solutions.

Further solidifying this partnership, Duos has secured a 5% equity stake in the parent of the owner of the assets. This equity position reflects Duos’ integral role in the commercialization, operation and management of these critical power assets.

“Our customers are looking for flexible and dependable energy options as they build out critical infrastructure,” said Chuck Ferry, Chief Executive Officer of Duos. “These assets, coupled with our operational excellence, provide a pathway to meet these demands without the delays or constraints of traditional energy sources.”

This agreement reinforces Duos’ strategic focus on addressing the evolving power needs of data centers, industrial facilities, and international energy markets. Duos Energy is in active discussions with U.S.-based data center developers and international energy projects for immediate deployment of the turbines. The company’s mission is to deliver agile and scalable energy solutions, supporting its customers’ growth while building out a robust energy business aligned with Duos’ long-term vision.

To learn more about Duos Energy Corporation, visit: www.duosenergycorp.com
To learn more about Fortress Investment Group, visit: www.fortress.com
To learn more about Duos Technologies, visit www.duostechnologies.com

About Duos Energy Corporation
Duos Energy Corporation, a subsidiary of Duos Technologies Group, Inc. (Nasdaq: DUOT), focuses on developing, owning, and operating sustainable energy projects to power Edge Data Centers and critical infrastructure industrial facilities across the United States. Specializing in clean-burning natural gas generation and green technologies, the company offers rapid deployment of dedicated off-grid power plants. With extensive industry experience, Duos Energy is dedicated to providing fast-track, reliable, and eco-friendly energy solutions that support mission-critical operations. For more information, visit www.duosenergycorp.com.

About Fortress Investment Group
Fortress Investment Group LLC is a leading, highly diversified global investment manager. Founded in 1998, Fortress manages $49 billion of assets under management as of September 30, 2024, on behalf of approximately 2,000 institutional clients and private investors worldwide across a range of credit and real estate, private equity and permanent capital investment strategies. For more information please visit www.fortress.com.

About Duos Technologies Group, Inc.
Duos Technologies Group, Inc. (Nasdaq: DUOT), based in Jacksonville, Florida, through its wholly owned subsidiaries, Duos Technologies, Inc., Duos Edge AI, Inc., and Duos Energy Corporation, designs, develops, deploys and operates intelligent technology solutions for Machine Vision and Artificial Intelligence (“AI”) applications including real-time analysis of fast-moving vehicles, Edge Data Centers and power consulting. For more information, visit www.duostech.com, www.duosedge.ai and www.duosenergycorp.com.

Forward-Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects -- both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated" and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law. All forward-looking statements attributable to Duos Technologies Group, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1a1d5524-9e14-4b78-82f9-a539625b205d

This press release was published by a CLEAR® Verified individual.

FAQ

What is the value of the DUOT asset management deal with Fortress Investment Group?

The deal is valued at $42 million over two years.

What does the DUOT asset management agreement involve?

The agreement involves managing 30 mobile gas-powered turbines capable of generating 850 megawatts of power.

What equity stake did DUOT secure in the new venture?

DUOT secured a 5% equity stake in the parent company owning the assets.

When was the DUOT asset management agreement with Fortress finalized?

The agreement was finalized on December 31, 2024.

What sectors will benefit from DUOT’s new asset management agreement?

The sectors include data centers and other critical infrastructure industries.

Who are the key partners in DUOT's asset management agreement?

The key partners are Duos Energy and Fortress Investment Group.

What is the power capacity of the turbines involved in DUOT's new deal?

The turbines have a power capacity of 850 megawatts.