Pure Technologies to be acquired by Xylem
- Pure shareholders to receive CAD $9.00 per share in cash, representing a 102.7% premium to the closing share price on December 8, 2017
- Transaction has received unanimous approval by Pure's Board of Directors
- Acquisition will accelerate penetration and growth of Pure's business under Xylem's ownership
CALGARY, Dec. 11, 2017 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR) is pleased to announce that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Xylem Inc. ("Xylem") (NYSE: XYL) whereby Xylem will acquire all of the issued and outstanding shares of Pure for CAD $9.00 per share in cash (the "Purchase Price"), representing an enterprise value for Pure of CAD $509 million.
The Purchase Price represents a 102.7% premium to the closing price of Pure's common shares on the Toronto Stock Exchange (the "TSX") on December 8, 2017 and a 97.9% premium to the 20-day volume weighted average price for the period ending that day.
The Board of Directors (the "Board") of Pure, having received a unanimous recommendation from a special committee comprised solely of independent directors (the "Special Committee"), has unanimously approved the transaction and recommends that Pure shareholders vote in favour of the transaction.
STRATEGIC RATIONALE
"The acquisition by Xylem is a highly positive outcome for our shareholders. The value being offered in this transaction is a recognition of the highly strategic and unique nature of Pure's business and technology," said Jamie Paulson, Executive Chairman of Pure. "In Xylem, Pure has found the right partner to accelerate growth and to have a positive impact on the water management ecosystem."
"Throughout Pure's evolution, we have been committed to delivering innovative and value-added solutions for our infrastructure clients," said Jack Elliott, President and CEO of Pure. "Following this transaction, as we become part of a global enterprise, we will be even better positioned to make a meaningful impact in solving the world's most pressing water and infrastructure challenges. The acquisition of our Company by Xylem will be of substantial benefit to Pure, its clients, its shareholders and employees."
"The addition of Pure will strengthen Xylem's position as a leading provider of intelligent solutions that address the water industry's most persistent problems," said Patrick Decker, Xylem President and Chief Executive Officer. "Aging infrastructure is a top concern of water utilities around the world, and infrastructure assessment is an attractive, growing market that directly addresses this challenge in a cost-effective way. Pure's solutions strongly complement the broader Xylem portfolio, particularly our recently acquired Visenti and Sensus solutions, creating a unique and disruptive platform of diagnostic, analytics and optimization solutions for clean and wastewater networks. Pure will also bring greater scale to our growing data analytics and software-as-a-service capabilities. As one company, we will provide customers with even more powerful and innovative solutions enabled by cutting-edge technologies."
TRANSACTION SUMMARY
The proposed transaction (the "Transaction") is to be completed by way of plan of arrangement under the Business Corporations Act (Alberta).
A special meeting (the "Special Meeting") of Pure shareholders will be called to consider the Transaction which will require approval of at least two-thirds of the votes cast by the Pure shareholders present in person or by proxy at the Special Meeting. All of the directors and executive officers of Pure, who together hold in aggregate approximately 6.9 million shares or 12.5% of the outstanding common shares of Pure, have entered into voting support agreements with Xylem pursuant to which they have agreed to vote all of their shares in favour of the Transaction, subject to their ability to terminate such agreements in certain circumstances.
The Arrangement Agreement contains customary representations and warranties of each party and interim operational covenants of Pure. The Arrangement Agreement also provides for, among other things, customary board support and non-solicitation covenants, subject to a "fiduciary out" for unsolicited superior proposals in favour of Pure and a provision for the right to match such superior proposals in favour of Xylem. The Arrangement Agreement provides for the payment of a termination fee of CAD $25 million to Xylem, in certain circumstances.
The Transaction is subject to various customary closing conditions, including receipt of Court approval, Pure shareholder approval, and regulatory approval under the Hart-Scott-Rodino Act (United States).
Further details with respect to the Transaction will be included in the information circular to be mailed to Pure shareholders in connection with the Special Meeting. The Special Meeting is expected to be held, and closing of the Transaction is expected to occur upon satisfaction of all conditions precedent thereto, in the first quarter of 2018. A copy of the Arrangement Agreement and the information circular will be filed on Pure's SEDAR profile and will be available for viewing at www.sedar.com.
RECOMMENDATION OF THE PURE BOARD
The Board, acting on the unanimous recommendation of the Special Committee (comprised solely of independent directors) and after consulting with its financial and legal advisors, has unanimously (i) determined that the Transaction is in the best interests of Pure and its shareholders, and (ii) resolved to recommend that Pure shareholders vote in favour of the Transaction.
In making their respective determinations, the Board and the Special Committee considered, among other factors, an opinion from National Bank Financial Inc. ("National Bank Financial") to the effect that the purchase price of CAD $9.00 per share to be received by Pure shareholders is fair, from a financial point of view, to the shareholders of Pure.
ADVISORS
National Bank Financial has been retained by the Special Committee as its exclusive financial advisor in connection with the Transaction. McCarthy Tetrault LLP acted as legal counsel to the Company and Osler, Hoskin & Harcourt LLP acted as legal counsel to the Special Committee.
ABOUT XYLEM
Xylem (NYSE:XYL) is a leading global water technology company committed to developing innovative technology solutions to the world's water challenges. The Company's products and services move, treat, analyze, monitor and return water to the environment in public utility, industrial, residential and commercial building services settings. With its October 2016 acquisition of Sensus, Xylem added smart metering, network technologies and advanced data analytics for water, gas and electric utilities to its portfolio of solutions. The combined Company's nearly 16,000 employees bring broad applications expertise with a strong focus on identifying comprehensive, sustainable solutions. Headquartered in Rye Brook, New York with 2016 revenue of $3.8 billion, Xylem does business in more than 150 countries through a number of market-leading product brands.
The name Xylem is derived from classical Greek and is the tissue that transports water in plants, highlighting the engineering efficiency of our water-centric business by linking it with the best water transportation of all – that which occurs in nature. For more information, please visit www.xylem.com.
ABOUT PURE
Pure Technologies Ltd. is an international asset management, technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:
- Premium technical services including pipeline inspection, leak detection and condition assessment;
- Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure;
- Sales of proprietary monitoring technologies for pipelines, bridges and structures; and
- Recurring revenue from data analysis, site maintenance, and from technology licensing.
The Pure Shares are listed on the Toronto Stock Exchange under the symbol PUR.
ADVISORIES
Forward Looking Statements
Certain information set forth in this press release, including Information and statements which may contain words such as "could", "plans", "should", "anticipates", "expects", "believes", "will" and similar expressions and statements relating to matters that are not historical facts, contain forward-looking statements, including but not limited to statements regarding: the proposed Transaction and the anticipated timing of closing; mailing of the information circular related to the Special Meeting and the timing thereof and timing of the Special Meeting; the benefits of the Transaction for Pure, its stakeholders and employees. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Pure's control. Completion of the Transaction is subject to a number of conditions which are typical for transactions of this nature. Failure to satisfy any of these conditions, the emergence of a superior proposal or the failure to obtain approval of Pure's Shareholders may result in the termination of the Arrangement Agreement. The foregoing list is not exhaustive. Additional information on these and other risks that could affect completion of the Transaction will be set forth in the information circular, which will be available on SEDAR at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The actual results, performance or achievement of Pure could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Pure will derive therefrom. Pure disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new Information, future events or otherwise, except as required by applicable securities laws.
"The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release"
SOURCE Pure Technologies Ltd.
To find out more about Pure Technologies Ltd. (TSX: PUR) contact Paul Moon, Director of Investor Relations; (403) 537-3244 or [email protected].
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