Pure Technologies Ltd. has announced that it has entered into a definitive arrangement agreement with Xylem Inc. whereby Xylem will acquire all of the issued and outstanding shares of Pure, representing an enterprise value for Pure of CAD $509 million.
The Purchase Price represents a 102.7 per cent premium to the closing price of Pure’s common shares on the Toronto Stock Exchange as of December 8th, 2017 and a 97.9 per cent premium to the 20-day volume weighted average price for the period ending that day.
“The acquisition by Xylem is a highly positive outcome for our shareholders. The value being offered in this transaction is a recognition of the highly strategic and unique nature of Pure’s business and technology,” said Jamie Paulson, executive chairman of Pure. “In Xylem, Pure has found the right partner to accelerate growth and to have a positive impact on the water management ecosystem.”
In making their respective determinations, the Board and the Special Committee considered, among other factors, an opinion from National Bank Financial Inc. to the effect that the purchase price of CAD $9.00per share to be received by Pure shareholders is fair, from a financial point of view, to the shareholders of Pure.
“Throughout Pure’s evolution, we have been committed to delivering innovative and value-added solutions for our infrastructure clients,” said Jack Elliott, president and CEO of Pure. “Following this transaction, as we become part of a global enterprise, we will be even better positioned to make a meaningful impact in solving the world’s most pressing water and infrastructure challenges.”
The board of directors of pure, having received a unanimous recommendation from a special committee comprised solely of independent directors, unanimously approved the transaction and recommends that Pure shareholders vote in favour of the transaction. The proposed transaction is to be completed by way of plan of arrangement under the Business Corporations Act of Alberta.
“The addition of Pure will strengthen Xylem’s position as a leading provider of intelligent solutions that address the water industry’s most persistent problems,” said Patrick Decker, Xylem president and chief executive officer. “Aging infrastructure is a top concern of water utilities around the world, and infrastructure assessment is an attractive, growing market that directly addresses this challenge in a cost-effective way.”
All of the directors and executive officers of Pure, who together hold in aggregate approximately 6.9 million shares or 12.5 per cent of the outstanding common shares of Pure, have entered into voting support agreements with Xylem pursuant to which they have agreed to vote all of their shares in favour of the Transaction, subject to their ability to terminate such agreements in certain circumstances.
“Pure’s solutions strongly complement the broader Xylem portfolio, particularly our recently acquired Visenti and Sensus solutions, creating a unique and disruptive platform of diagnostic, analytics and optimization solutions for clean and wastewater networks,” said Decker. “Pure will also bring greater scale to our growing data analytics and software-as-a-service capabilities.”