Consistent with Executive Order 13777, the U.S. Environmental Protection Agency announced it is seeking public input on existing regulations that...
Ionics, Incorporated signed a definitive agreement 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, the stock portion of the consideration would be valued at $138 million. Ecolochem, a privately held company headquartered in Norfolk, Va., 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 Sept. 30. 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.
"This acquisition fits well with our strategy of building our recurring revenue business," said Douglas Brown, Chief Executive Officer of Ionics. "We believe Ecolochem is well-positioned to benefit from the market trend towards outsourcing water services, particularly in the power industry."
Ecolochem shareholders will be entitled to name two additional directors to Ionics' existing nine-member board. Lyman B. Dickerson, President of Ecolochem, will be one of the new directors. Dickerson will also continue to run the Ecolochem business and will be named Vice President of Ionics' Water Systems Division.
This transaction was unanimously approved by Ionics' board of directors and agreed to by Ecolochem's shareholders. The acquisition is expected to close in early 2004. The transaction is subject to Hart-Scott-Rodino Act review, approval by Ionics shareholders, and other customary closing conditions.