Pure Technologies Announces Acquisition

Pure Technologies Ltd. announced that it has agreed with the shareholders of The Pressure Pipe Inspection Co. Ltd. (PPIC) to purchase all of the issued and outstanding shares of PPIC for up to $34.9 million in cash and common stock of Pure. The boards of directors of both companies have approved the transaction, subject to certain conditions and to the approval of the TSX Venture Exchange. The transaction is expected to close on or before Aug. 31, 2010.

PPIC, a privately-held company with headquarters in Mississauga, ON, Canada, is a provider of large-diameter water and wastewater pipeline condition assessment. PPIC is currently active in North America (including Mexico), South America, the Philippines and Hong Kong. For the fiscal year ended Sept. 30, 2009, PPIC had revenues of $14.6 million.

The base purchase price is $30 million with provision for a maximum additional payment of $4.9 million based on PPIC's revenues exceeding $20 million for the fiscal year ended Sept. 30, 2010. It is anticipated that the consideration will be paid in the form of approximately 29% in cash and 71% in Pure common stock, to be issued, subject to TSX Venture Exchange approval, at $4.44 per share which issue price was negotiated as part of the transaction.

Emerald Technology Ventures, PPIC’s largest shareholder, will have the right to nominate one director to Pure’s board of directors. Subject to TSX Venture Exchange approval upon closing the transaction, Scott MacDonald, partner with Emerald Technology Ventures, will join Pure’s board of directors.

Dr. Brian Mergelas will remain the CEO of PPIC until the transaction close, to which point he has agreed to accept the position of senior vice president, corporate strategy & development, with Pure.

Canaccord Genuity acted as financial advisor to Pure on this transaction and Kirchner Private Capital Group acted as financial advisor to PPIC. Bennett Jones LLP acted as legal counsel to Pure and Heenan Blaikie LLP as legal advisor to PPIC and its shareholders.

Source: Pure Technologies Ltd.