Pure Technologies to Acquire Wachs Water Services

Pure Technologies Ltd., announced through its wholly-owned subsidiary, Pure Holding Inc., that it has entered into a definitive agreement to acquire the business of Wachs Valve and Hydrant Services, LLC, a privately-held company operating as Wachs Water Services. In business for 15 years and headquartered in?Buffalo Grove, Ill., Wachs Water Services is a leading provider of flow control maintenance and support, leak detection and related asset management services to the water sector in the United States. Wachs Water was formed from the E.H. Wachs Company, which was founded in 1883.

The total purchase price is?$18.5 million (U.S.), consisting of?$13.5 million?in cash and?$5 million?in common shares of Pure (totaling 878,640 shares), to be issued in equal tranches on the six-month, 12-month, and 18-month anniversaries of closing the transaction.

Closing is expected to occur early in the second quarter of 2015. The purchase price includes?US$3.5 million?in net working capital. For the trailing 12 months ended Sept. 30, 2014, Wachs Water generated revenue of?$18.7 million?(unaudited) with an estimated order book of?$13.6 million. Adjusted EBITDA was?$3 million?during the trailing 12 months ended?Sept. 30, 2014?compared to?US $2.3 million?generated during the 12 months ended?Dec. 31, 2012, a compound annual growth rate of 16 percent over this period. Over this same timeframe, adjusted EBITDA margins grew from 12 percent to 16 percent.

?We are delighted with the opportunity to add Wachs Water to the Pure team,? said?Jack Elliott, president and CEO of Pure. ?This important acquisition further diversifies Pure?s business in the U.S. water sector, broadens our client base especially in the small and medium-sized utility space, and provides us with complementary revenue streams in related pipeline management activities. It also brings to Pure significant management capability, and enhanced business development and field services resources.

?Wachs Water?s experienced management team, led by Cliff Wilson, president, will complement our own and will be instrumental in increasing operational efficiency and managing growth in our North American business. The acquisition is consistent with our stated strategy of selectively adding expanded distribution channels for our suite of proprietary inspection and condition assessment technologies.?

?With Wachs Water, our combined services and expertise encompass the length of the underground infrastructure value chain, further positioning us as the leader in our space,? added?Michael Higgins, Pure?s senior vice president for the Americas region. ?Wachs Water?s expertise in pipeline valve, hydrant and distribution systems management greatly expands our overall offering. Our respective water utility clients will benefit from an enhanced and integrated solution set which includes Pure’s proprietary inspection and monitoring technologies. Together, we now have the capability to fully manage pipeline condition assessment projects, from valve management to pipeline re-commissioning.”

?We are excited to join the Pure team,? said?Cliff Wilson, co-founder and president of Wachs Water. ?Together, we will be in a unique position to help utilities solve underlying and fundamental underground aging infrastructure challenges. I see this as a tremendous fit that delivers opportunities to better serve our clients while also providing additional opportunities for our team members. I look forward to a bright future.?

Canaccord Genuity acted as financial advisor and Husch Blackwell LLP acted as legal counsel to Pure on this transaction. Capstone Partners acted as financial advisor and Chuhak & Tecson P.C. acted as legal counsel to Wachs Water.

Wachs Water’s roots reach back 132 years to the creation of the Wachs Company in 1883. The Wachs Companies have been trusted solutions providers to water utilities for more than 60 years. Wachs Water Services was founded in 2000, as a service company focused on helping water utilities increase control of their aging distribution networks. Wachs Water currently provides services to the water and wastewater pipeline sector, including information management, valve assessment, flow control, leak detection and wastewater collection system assessment and prioritization.

Pure Technologies 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.

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