TSX-V: HEO
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.
Prospective disclosures
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.