Ionics, Inc. has signed a deal to acquire Ecolochem, Inc. and its affiliated companies for $200 million in cash and approximately 4.91 million shares of Ionics common stock.
Based on the 30 trading days' average closing stock price ended Nov. 17, 2003, the stock portion of the consideration would be valued at $138 million. Ecolochem, a privately held company is a provider of emergency, short and long-term mobile water treatment services to the power, petrochemical and other industries.
This transaction is expected to significantly augment Ionics' existing capabilities and result in a global water technology company with pro forma projected 2004 combined revenues of approximately $460 million.
Ecolochem had revenue, EBITDA, and operating income of approximately $109, $40, and $28 million, respectively, for the fiscal year ended September 30, 2003. These results exclude approximately $2.3 million in non-recurring charges.
Ionics currently expects to fund the cash portion of the purchase price from available cash resources and the proceeds from new credit facilities committed (subject to customary conditions) by a group led by UBS Investment Bank. On a pro forma basis, Ionics expects the transaction to add approximately $0.14 per share to its projected fiscal 2004 earnings before restructuring charges.
On the same basis and excluding amortization of intangible assets, the transaction is expected to add approximately $0.31 per share.