WESA and Seprotech announce letter of intent for proposed merger
29 4월 2012 - 4:49AM
PR Newswire (Canada)
OTTAWA, May 2, 2012 /CNW/ - Seprotech Systems Incorporated
("Seprotech") and WESA Group Inc. ("WESA") today announced that
they have entered into a non-binding letter of intent under which
Seprotech will acquire 100% of privately-held WESA in a reverse
takeover (the "Transaction"). Upon completion of the Transaction,
the combined entity (the "Resulting Issuer") is expected to be a
leading provider of earth sciences, water resources and
environmental engineering services, and wastewater/water treatment
systems. The intent is to build an integrated Product and Service
organization that provides intelligent solutions to complex
environmental problems both in Canada and abroad. According to
Seprotech's CEO, Harry Marshall, "this combination takes Seprotech
immediately to a new level of capabilities - financial, technical
and customer reach. WESA's size and revenue base will provide
financial strength, their network of offices and extensive client
base will provide a new platform for enhancing our visibility in
the marketplace, and their team of some 125 engineering,
professional and project staff will provide welcome support to our
technical and project management team." WESA's CEO, Roger Woeller
stated, "the synergy between the two companies is striking - each
company has personnel who have previously worked at the
other, we share similar customer sectors from mining to land
developers to municipalities, our geographic reaches are similar
and we are already collaborating on a number of projects together.
Combined, we are able to provide our clients with a much broader
spectrum of professional services and complete systems to solve
their problems. We see Seprotech's public company status and their
current base of business in the water industry as a platform for
much more rapid growth than we otherwise could have achieved
alone." CEO of the Resulting Issuer, William Touzel explained that:
"our plan is to operate in two distinct divisions. We will combine
the operations of our WESAtech subsidiary, which was previously run
by Harry Marshall, who is now CEO of Seprotech, into Seprotech's
operation to form a unified technology systems division, and WESA's
environmental consulting division will continue to provide
independent professional services to our clients." Information
Concerning WESA WESA was founded in 1978 under the laws of Ontario.
WESA is a professional services company focussed on environmental
earth sciences, water resources, waste management, occupational
health, safety and hygiene and renewable energy needs of industry
and all levels of government. WESAtech, a wholly-owned subsidiary,
supplies turn-key water treatment systems to industry, and in
particular the mining sector. More information can be obtained at
www.wesa.ca Selected WESA Financial Information (000s - Unaudited)
__________________________________________ | | 2011| 2010| 2009|
|__________________|_______|_______|_______| |Revenue
|$22,554|$20,417|$22,649|
|__________________|_______|_______|_______| |Gross Margin |
$4,464| $4,496| $4,437|
|__________________|_______|_______|_______| |Operating Income |
$1,108| $1,359| $1,260|
|__________________|_______|_______|_______| |Net Income | $157|
$230| $566| |__________________|_______|_______|_______| |Total
Assets |$12,447|$13,207|$11,492|
|__________________|_______|_______|_______| |Total Liabilities |
$6,829| $7,883| $6,445|
|__________________|_______|_______|_______| |Shareholder Equity|
$5,480| $5,199| $4,969|
|__________________|_______|_______|_______| WESA Insiders
_______________________________________________________ |Name
|Capacity |Residence|
|___________________|_________________________|_________| |Roger M.
Woeller |CEO, Director |Ontario |
|___________________|_________________________|_________| |William
M. Touzel |President, CFO & Director|Ontario |
|___________________|_________________________|_________| |Harry J.
Marshall |Director |Ontario |
|___________________|_________________________|_________| |Wayne L.
Ingham |Director |Ontario |
|___________________|_________________________|_________| |Francois
A. Richard|Director |Quebec |
|___________________|_________________________|_________| |Andre Y.
D'Astous |Director |Quebec |
|___________________|_________________________|_________| |C.
Ronald Donaldson|Director |Ontario |
|___________________|_________________________|_________| |Nell van
Walsum |Director |Quebec |
|___________________|_________________________|_________| |David W.
Hopper |Director |Ontario |
|___________________|_________________________|_________| 10%
Shareholders Roger M. Woeller and spouse beneficially own
approximately 20.9% of WESA; C. Ronald Donaldson and spouse
beneficially own approximately 12.54% of WESA, and Nell van Walsum
and Andre Y. D'Astous beneficially own approximately 12.54% of
WESA. Existing Relationships William B. Touzel, a Director of
Seprotech, is also President of WESA, and is beneficial owner of
52,500 common shares of WESA, representing approximately 8.6% of
the issued and outstanding common shares. Harry J. Marshall, a
director and officer of Seprotech, is a director of WESA, but does
not own any shares of WESA. Transaction Summary The Transaction is
an arm's length transaction and will constitute a reverse-takeover
pursuant to the policies of the TSX Venture Exchange ("TSX.V").
Completion of the Transaction ("Closing") is subject to the
entering into by Seprotech and WESA of a definitive share exchange
agreement, and to several conditions, including, but not limited to
the approval of a simple majority of Seprotech shareholders.
Seprotech intends to convene a special meeting of shareholders (the
"Meeting") to seek such shareholder approval as soon as possible
following the signing of a definitive share exchange agreement and
receipt of all required TSX.V approvals. The other conditions are
summarized below. Seprotech currently has issued and outstanding
62,921,926 common shares, and 6,230,000 options to purchase
Seprotech common shares, at prices ranging between $0.10 and $0.26
per share. At the Meeting, Seprotech also intends to seek the
approval of its shareholders to consolidate its common shares on a
1 for 10 basis (the "Consolidation"). Assuming completion of the
Consolidation, Seprotech would have issued and outstanding,
immediately prior to Closing (i) 6,292,193 post-consolidation
Seprotech common shares and (ii) options to purchase 623,000 common
shares, each exercisable at a price of from $1.00 - $2.60 per
share. It is currently contemplated that the Transaction will be
completed by way of a share exchange agreement pursuant to which
Seprotech will acquire all of the issued and outstanding shares of
WESA in consideration for the issuance to WESA of 14,157,433
post-consolidation shares of Seprotech, each at a deemed value of
approx. $0.664 per share for aggregate consideration of $9,400,000.
Upon Closing, WESA will become a wholly-owned subsidiary of
Seprotech and WESA will control approximately 69.23 % of the
Seprotech common shares of the Resulting Issuer. Pursuant to the
LOI, WESA has agreed to provide to Seprotech a secured credit
facility of up to $2,000,000 to be available at the sole discretion
of WESA upon the approval of the TSX.V and completion of
documentation. Management and Board of Directors of Resulting
Issuer Effective upon Closing, the board of directors of the
Resulting Issuer will consist of five members, comprising the CEO,
one to be nominated by each of WESA and Seprotech, and two
independent directors to be jointly nominated. The Chief Executive
Officer of the Resulting Issuer will be William M. Touzel, who is
presently President of WESA; the Chief Financial Officer will be
Ian. W. Malone, presently Chief Financial Officer of Seprotech. The
other senior management of both companies will continue to play
active roles in the combined entity. Conditions to the Transaction
The proposed Transaction is subject to a number of terms and
conditions including the parties entering into a definitive
agreement with respect to the Transaction (such agreement to
include representations, warranties, conditions and covenants
typical for a transaction of this type), the completion of
satisfactory due diligence investigations, the approval of the
directors and shareholders of each of Seprotech and WESA, the
approval of the TSX.V and other relevant regulatory
authorities, and various other customary conditions that must be
satisfied prior to closing, which is expected to take place no
later than August 31, 2012. Seprotech also advises that its
debenture in a principal amount of $705,000 matured on April 30,
2012. In light of the proposed Transaction, the Company will ask
its debenture holders to agree to the conversion of 50% of the
debenture to common shares of the Company at a deemed
(pre-consolidation) price of $0.10 per share, subject to the
approval of the TSX.V; and to the repayment over 12 months of the
remaining 50% of the debenture in equal monthly payments commencing
May 15, 2012. It is expected that this, or a comparable arrangement
acceptable to both Seprotech and WESA, will be completed prior to
completion of the proposed Transaction. Other Information Trading
in Seprotech common shares will remain halted pending the
satisfaction of all applicable requirements of the TSX.V. There can
be no assurance that trading in Seprotech common shares will resume
prior to the completion of the Transaction. Further details
concerning the Transaction, WESA (including additional financial
information) and other matters will be announced when a definitive
agreement is reached. Seprotech will engage a sponsor in connection
with the Transaction if required in accordance with applicable
TSX.V policies. About Seprotech Seprotech is a provider of
engineered water and wastewater treatment solutions to the
municipal/land development, resource sector and military market
place, including Reverse Osmosis water purification systems,
ROTORDISK® biological sewage treatment package plants and
CrystalBlue™ membrane-based water recycling systems. More
information can be obtained at www.seprotech.com Forward-looking
Statements This news release contains certain "forward looking
statements" within the meaning of applicable securities laws.
Seprotech has made numerous assumptions regarding, among other
things, the ability of Seprotech and WESA to satisfy all the
closing conditions to complete the Transaction. Readers are
cautioned that the plans, intentions or expectations disclosed in
any forward-looking statements and underlying assumptions may not
be achieved and that they should not place undue reliance on any
forward-looking statement, each of which is expressly qualified in
its entirety by this cautionary statement. Although the Company
believes that the expectations conveyed by the forward-looking
information are reasonable based on information currently available
to it, these statements are not guarantees and involve a number of
risks, uncertainties and assumptions, both known and unknown. The
results or events depicted in these forward-looking statements may
differ materially from actual results or events. Many factors could
cause results to differ materially from those stated including, but
not limited to: the Transaction may not be completed upon the terms
contemplated herein, or at all; the possibility of not satisfying
all of the closing conditions to complete the Transaction; the
possibility that Seprotech's shareholders do not approve the
Transaction at the special meeting of shareholders; difficulties or
delays in obtaining regulatory approvals; the ability of WESA or
Seprotech to retain existing customer contracts; risks related to
integration of acquisitions; and the ability to retain and obtain
qualified staff as well as various other factors which are
discussed in Seprotech's filings with applicable securities
regulatory authorities at www.sedar.com Any forward-looking
statement speaks only as of the date of this news release and,
except as may be required by applicable securities laws, Seprotech
disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or
results or otherwise. All information contained in this press
release relating to WESA was provided by WESA for inclusion herein.
Seprotech has not independently verified such information and shall
bear no liability for any misrepresentation contained herein.
Completion of the Transaction is subject to a number of conditions,
including, but not limited to, acceptance by the TSX.V and
disinterested shareholder approval. The Transaction cannot close
until the required shareholder approval is obtained. There can be
no assurance that the Transaction will be completed as proposed or
at all. Investors are cautioned that, except as disclosed in the
management information circular or filing statement, as applicable,
of Seprotech to be prepared in connection with the Transaction, any
information released or received with respect to the Transaction
may not be accurate or complete and should not be relied upon.
Trading in the securities of Seprotech should be considered to be
highly speculative. The TSX.V has in no way passed upon the merits
of the proposed Transaction, and neither TSX.V nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX.V) accepts responsibility for the adequacy or accuracy of this
release. The TSX.V has neither approved nor disapproved of the
information contained herein. Seprotech Systems
Incorporated CONTACT: Mr. Ian W. Malone, CFOTel: (613) 523-1641Fax:
(613) 731-0851
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