PURE TECHNOLOGIES ANNOUNCES ACQUISITION OF ELECTROMECHANICAL TECHNOLOGIES, INC.
CALGARY, June 13, 2011 /CNW/ - Pure Technologies Ltd., ("Pure" or the "Company") (TSX: PUR) announced today that it has purchased the business and assets of Electromechanical Technologies, Inc. ("EMTEK"), a Salt Lake City-based developer of advanced pipeline inspection technologies (www.emtek.us).
The base purchase price is US$3,000,000 payable in cash. There is provision for additional payments of up to US$4,000,000 based on a percentage of revenue recognized from the purchased technologies to the end of 2013. Additional consideration cannot exceed US$2,000,000 in any year. Any additional payments will be paid approximately 75% in cash and 25% in Pure's common stock.
Commenting on the transaction, Jack Elliott, Pure's President and COO, said:
"The ground-breaking extra-high resolution magnetic flux leakage (XHR-MFL) systems developed by EMTEK will immediately position Pure as the industry leader in condition assessment of ferrous water and wastewater pipelines. Conventional MFL is a well established technique for inspecting oil and gas pipelines; however the internal cement mortar lining common in water pipelines has always created challenges. EMTEK's patented technology has overcome these challenges.
"While the majority of our growth to date has come from the inspection, condition assessment and monitoring of prestressed concrete pressure pipelines, this type of pipe represents less than five percent of the total installed base of pressure pipe around the world. The EMTEK technology, opens up a much larger available market to us, and complements our SmartBall® and Sahara® solutions for leak detection and condition assessment, which are applicable to all types of pressure pipe.
"In the oil and gas sector, we will now be able to package the EMTEK system with our unique SmartBall leak detection system, thus providing the only combined integrity and pinhole-leak detection capability available on the market. Recent high-profile oil and gas pipeline leaks in North America have resulted in increasing regulatory and political pressure on operators to upgrade their leak detection systems. We have already seen increasing interest in our SmartBall system and we expect our enhanced offering to accelerate our growth in this sector.
"EMTEK's commitment to innovative non- destructive testing systems fits well with Pure's aggressive R&D program and the patents acquired with the transaction will strengthen our already comprehensive IP portfolio. EMTEK's solutions will be delivered through our regional offices in the Americas, Middle East and Australia; through our Hong Kong joint venture in greater China; and through selected licensees."
About Pure Technologies Ltd.
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:
- Sales of proprietary monitoring technologies for pipelines, bridges and structures (SoundPrint®, SoundPrint® AFO);
- Recurring revenue from data analysis and site maintenance for these technologies, and from technology licensing;
- Premium technical services including inspection, leak detection and condition assessment (P-Wave®, SmartBall®, Sahara®, PipeDiver™, PureRobotics™);
- Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure (Openaka, Price Brothers UK Ltd, and Jason Consultants).
This release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words "believes", "expects", "anticipates", "estimates", "intends", "plans", or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and the Company's actual results could differ materially from those anticipated. Forward-looking statements are based on the opinions and estimates of Management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in, the Company's filings with Securities Regulators (www.sedar.com).
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