Alternext: MNEMO: ALHEO
NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRE SERVICES OR DISSEMINATION IN
THE UNITED STATES
All amounts in Canadian dollars unless otherwise stated.
QUEBEC CITY, Dec. 5, 2013 /CNW Telbec/ - (TSXV: HEO) - H2O Innovation Inc. ("H2O Innovation" or the "Company") announces the execution of a definitive
stock purchase agreement (the "Definitive Agreement") and the
completion of the previously announced acquisition of all of the issued
and outstanding shares of Common Stock of Piedmont Pacific Corporation,
a company located in Oakland, CA and one of the leading manufacturers
in the world of flexible pipe couplings and other pipe fittings for
highly corrosive environments, for a total consideration of
approximately $4.0 million (US$ 3.8 million) (the "Acquisition").
Concurrent Private Placement Financings
The Company also announces that it has closed the previously announced
bought deal private placement (the "Bought Deal") and concurrent
additional non-brokered private placement (the "Additional Placement"
and together with the Bought Deal, the "Offerings") of common shares of
the Company (the "Common Shares") at a price of $0.23 per Common Share
for total gross proceeds of approximately $8 million. The Bought Deal
was conducted by GMP Securities L.P. Since the execution of the
Definitive Agreement and completion of the Acquisition occurred
concurrently with the closing of the Bought Deal, the Company has
delivered Common Shares instead of subscription receipts to investors
in the Bought Deal.
Certain insiders of the Company, being Caisse de dépôt et placement du
Québec, holder of more than 10% of the Common Shares, Richard A. Hoel,
director and holder of more than 10% of the Common Shares, Philippe
Gervais, director of the Company, Pierre Côté, director of the Company,
Élaine Phénix, director of the Company, Marc Blanchet, Vice President
Corporate & Legal Affairs of the Company, Josée Riverin, Vice President
Finance of the Company, Guillaume Clairet, Executive Vice President of
the Company, and Frédéric Dugré, director and President and Chief
Executive Officer of the Company, participated in the Offerings and
subscribed for an aggregate of 3,941,737 Common Shares representing an
aggregate amount of approximately $906,600. Participation of insiders
of the Company in the Offerings constitutes a "related party
transaction" as defined under Regulation 61-101 respecting Protection of Minority Security Holders in
Special Transactions ("Regulation 61-101"). The Offerings are exempt from the formal
valuation and minority shareholder approval requirements of
Regulation 61-101 as neither the fair market value of securities being
issued to insiders nor the consideration being paid by insiders will
exceed 25% of the Company's market capitalization. The Company did not
file a material change report 21 days prior to the closing of the
Offerings as the details of the participation of insiders of the
Company had not been confirmed at that time.
Investissement Québec ("IQ") has participated in the Bought Deal and
subscribed for 19,130,435 Common Shares representing 18.28% of the
issued and outstanding Common Shares. In connection with IQ's
subscription, the Company has entered into an agreement with IQ
granting the right to IQ to appoint a representative of IQ on the Board
of Directors of the Company.
The Company used a portion of the net proceeds of the Offerings to
finance the Acquisition. The remaining portion of the net proceeds of
the Offerings will be used for working capital purposes, as necessary
to support the up-coming growth in the Company's systems sales backlog.
The Common Shares issued as part of the Offerings are subject to a
statutory resale restriction until April 6, 2014.
H2O Innovation had received an advance income tax ruling from the
Ministère du Revenu du Québec confirming that H2O Innovation meets the criteria of a "qualified issuing corporation" in
accordance with the Québec Stock Savings Plan II. The Common Shares to
be issued under the Offerings, if subscribed by a qualified mutual
fund, are "qualifying shares" as per such plan.
The Common Shares have not and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an applicable exemption from
the registration requirements under the act. This news release shall
not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful.
Certain statements set forth in this press release regarding the
operations and the activities of H2O Innovation as well as other communications by the Company to the
public that describe more generally management objectives, projections,
estimates, expectations or forecasts may constitute forward-looking
statements within the meaning of securities legislation.
Forward-looking statements concern analysis and other information based
on forecast future results, performance and achievements and the
estimate of amounts that cannot yet be determined. Forward-looking
statements include the use of words such as "anticipate", "if",
"believe", "continue", "could", "estimate", "expect", "intend", "may",
"plan", "potential", "predict", "project", "should" or "will", and
other similar expressions, as well as those usually used in the future
and the conditional, notably regarding certain assumptions as to the
success of a venture. Those forward-looking statements, based on the
current expectations of management, involve a number of risks and
uncertainties, known and unknown, which may result in actual and future
results, performance and achievements of the Company to be materially
different than those indicated. Information about the risk factors to
which the Company is exposed is provided in the Annual Information Form
dated September 24, 2013 available on SEDAR (www.sedar.com). Unless required to do so pursuant to applicable securities
legislation, H2O Innovation assumes no obligation to update or revise forward-looking
statements contained in this press release or in other communications
as a result of new information, future events and other changes.
About H2O Innovation
H2O Innovation designs and provides state-of-the-art, custom-built, and
integrated water treatment solutions based on membrane filtration
technology to municipal, energy & natural resources end-users. H2O Innovation also provides a complete line of specialty chemicals and
consumables for membrane filtration and reverse osmosis systems. For
more, visit www.h2oinnovation.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) nor
the Alternext Exchange accepts responsibility for the adequacy or
accuracy of this release.
SOURCE: H2O Innovation Inc.
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