Seprotech Systems Incorporated

Seprotech Systems Incorporated

October 11, 2007 13:48 ET

Water and Wastewater Treatment Companies Combine Forces: Seprotech Announces Agreement to Purchase P.J. Hannah

OTTAWA, ONTARIO--(Marketwire - Oct. 11, 2007) - Seprotech Systems Inc. (TSX VENTURE:SET) is pleased to announce that it has entered into a letter of intent to acquire by way of asset purchase the business of P.J. Hannah Equipment Sales Corporation ("P.J. Hannah Corp.") of Surrey, British Columbia. The purchase price consists of approximately $250,000 cash, $400,000 payable over four years, $300,000 subject to an earn out based on new sales generated from existing P.J. Hannah Corp.-related sales proposals over the next three years, and $200,000 to be satisfied by the issuance of 850,000 common shares of Seprotech, plus a work in progress revenue-sharing arrangement.

P.J. Hannah Corp, founded in 1973 by Peter Hannah, has had revenues (unaudited) ranging from approximately $2.0 million to $3.3 million per year over the past five years. It has experienced substantial growth this year with 2007 revenues expected to be approximately $5 million. P.J. Hannah Corp. manufactures a range of water and wastewater treatment equipment for use in municipalities and by the resource sector. Peter Hannah will remain with the combined company as a consultant and all of P.J. Hannah Corp.'s employees will be retained.

"We are very happy that P.J. Hannah Corp. is coming together with Seprotech," said Martin J. Hauschild, President & CEO of Seprotech. "The capabilities and talents offered through the combination of our companies are greater than the sum of their parts and we view this transaction as highly accretive on a number of levels. This acquisition will provide skilled staff and distribution - a key element in achieving rapid growth for Seprotech. This deal provides Seprotech with essential distribution and service coverage in Western Canada and expanded coverage elsewhere, particularly to clients in the mining, oil & gas and land development sectors."

"P.J. Hannah Corp. is an excellent company with skilled staff and a very good reputation in the environmental industry," said Justin Connidis, Seprotech Chairman, "We hope to leverage tremendous future growth from this acquisition. There are many synergies between our two companies and our people. We believe the combination will strengthen our sales and delivery capabilities in the domestic and international marketplace."

"I believe that our coming together will vastly improve the combined companies prospects," said Peter Hannah, President of P.J. Hannah Corp., "The international marketplace has become increasingly competitive in a high Canadian dollar and high commodity price environment. By bringing together our two companies, we are creating a Canadian company that can effectively compete worldwide by efficiently selling and delivering the most advanced environmental technologies related to water into the marketplace."

On closing, P.J. Hannah Corp. will operate as a division of Seprotech based in Surrey, British Columbia. P.J. Hannah Corp's and Seprotech's Ontario sales offices will be merged. The purchase is expected to close on November 30, 2007. The transaction is subject to formal agreements being entered into and approval by the TSX Venture Exchange.

Seprotech is a provider of pre-engineered water and wastewater treatment plants to the land development, industrial and military market place, including membrane-based water treatment systems and the ROTORDISK® biological wastewater treatment systems.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein. Some of the statements in this press release, including those relating to the Company's strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions, are forward-looking statements within the meaning of securities laws. Forward-looking statements include, without limitation, the information concerning possible or assumed future results of operations of the Company. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. The Company does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, except as required by law.

Contact Information

  • Seprotech Systems Inc.
    Mr. Robert J. Searle, CFO
    Investor Relations
    613-731-0851 (FAX)