Trojan Technologies to Acquire Majority Interest in US Peroxide
Trojan Technologies Inc. will acquire a 51% interest in US Peroxide, LLC of Laguna Niguel, California. The purchase of US Peroxide expands the range of integrated solutions Trojan provides for water and wastewater treatment and supports Trojan's strategy for revenue growth by building on new product solutions in existing markets.
US Peroxide is the largest North American supplier of hydrogen peroxide (H2O2) for environmental service applications and also offers equipment and services related to the use and monitoring of hydrogen peroxide. Hydrogen peroxide is used for odor reduction and corrosion control in municipal wastewater treatment applications. Trojan uses hydrogen peroxide in its
existing environmental contaminant treatment (ECT) solutions, which are designed to destroy chemicals found in contaminated water supplies.
"US Peroxide's customer-focused strategy and product offering fits well with our company," stated Marvin DeVries, President and CEO of Trojan Technologies. "Our business is to deliver solutions that increases our customers' confidence in the quality of their water. This acquisition enhances our ability to do that by offering an integrated solution that complements our core offerings for water treatment. It also provides Trojan with an enhanced growth opportunity and a meaningful addition to our recurring annual revenue."
The purchase price of the initial 51% interest will be US$5.2 million, to be paid in cash, subject to adjustment on completion of US Peroxide's audited financial statements for the year ending December 31, 2003. In 2007 and 2009, Trojan will purchase 34% and the remaining 15% interest, respectively, provided certain performance targets are achieved. The valuation of these subsequent purchases will be based on US Peroxide's performance. The initial purchase will close on January 5, 2004 subject to obtaining certain consents and normal conditions. The net impact on Trojan's financial performance is expected to be neutral to earnings in 2004 and accretive to earnings in 2005
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