Calgary-based Pure Technologies Ltd. has announced that it will purchase all of the issued and outstanding shares of The Pressure Pipe Inspection Company Ltd. for up to $34.9 million in cash and common stock of Pure.

The Boards of Directors of both companies have approved the transaction, subject to certain conditions and to the approval of the TSX Venture Exchange. The transaction is expected to close on or before August 31, 2010.

PPIC, a privately-held company with headquarters in Mississauga, Ontario, specializes in large diameter water and wastewater pipeline condition assessment. PPIC is currently active in North America (including Mexico), South America, the Philippines and Hong Kong. For the fiscal year ended September 30, 2009, PPIC had revenues of $14.6 million.

The base purchase price is $30,000,000 with provision for a maximum additional payment of $4,900,000 based on PPIC’s revenues exceeding $20,000,000 for the fiscal year ended September 30, 2010. It is anticipated that the consideration will be paid in the form of approximately 29 per cent in cash and 71 per cent in Pure common stock, to be issued, subject to TSX Venture Exchange approval, at $4.44 per share which issue price was negotiated as part of the transaction. Emerald Technology Ventures, PPIC’s largest shareholder, will have the right to nominate one director to Pure’s board of directors. Subject to TSX Venture Exchange approval upon closing the transaction, Scott MacDonald, partner with Emerald Technology Ventures, will join Pure’s board of directors.

Dr. Brian Mergelas will remain the CEO of PPIC until the transaction close, to which point he has agreed to accept the position of senior VP, corporate strategy & development, with Pure Technologies.


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