Attached files
| file | filename |
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| 8-K - CURRENT REPORT - Energy Recovery, Inc. | eri_8k-120209.htm |
| EX-2.1 - AGREEMENT AND PLAN OF MERGER - Energy Recovery, Inc. | ex2-1.htm |
EXHIBIT
99.1
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Press
Contacts:
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Audrey
Bold
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Dan
Borgasano
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Energy
Recovery, Inc.
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Schwartz
Communications, Inc.
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+1
510.746.2529
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+1
781.684.6660
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abold@energyrecovery.com
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ERI@schwartz-pr.com |
ENERGY
RECOVERY, INC. SIGNS DEFINITIVE AGREEMENT
TO
ACQUIRE PUMP
ENGINEERING, L.L.C.
Combined
Offering Expands ERI Product Portfolio and Desalination Addressable
Market;
Accelerates
Growth into New Markets
SAN LEANDRO, Calif.— December 2, 2009—Energy Recovery,
Inc.
(NASDAQ: ERII), a leader in the design and development of energy recovery
devices for the desalination industry, today announced it has entered into a
definitive agreement to acquire all of the equity interests of Pump Engineering,
L.L.C. based in New Boston, Michigan. Under the terms of the agreement, ERI will
pay the shareholders of Pump Engineering $20 million in cash plus one million
shares of ERI Common Stock. The completion of the transaction, which is subject
to satisfaction of customary conditions, is expected to take place in the fourth
quarter of 2009.
Pump
Engineering is a leading provider of centrifugal turbine energy-saving
technology for seawater and brackish desalination applications, and has
demonstrated support for emerging markets such as natural gas and high pressure
fluid processing. Pump Engineering’s hydraulic turbochargers and pumps are
custom-designed to reduce energy consumption and increase efficiency in specific
process conditions. Much like ERI’s line of PX energy recovery devices, Pump
Engineering’s products are simple to operate, durable and require a small
footprint in a plant.
"ERI’s
acquisition of Pump Engineering is aligned with our growth strategy of expanding
our product offerings and addressing potential new markets. It allows ERI to
offer our clients multiple complementary technologies that are unmatched in the
industry,” said ERI President and CEO G.G. Pique. “This acquisition underscores
ERI’s commitment to lead a global effort to prove that desalination is an
affordable, environmentally sound and energy-efficient answer to the growing
water crisis. Pump Engineering is the leading, high-quality energy recovery
device solution in areas where the cost of power is low and the customer is more
sensitive to the up-front capital cost. With dedicated sales and marketing,
technical and support teams, the combined client base will benefit from a total
solution package with enhanced customer service capabilities and a wider breadth
of technical expertise in R&D. We can now supply any desalination
project in the world with the most appropriate energy recovery
device.”
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ERI
believes that the acquisition of Pump Engineering will enhance the Company’s
competitive position and broaden its addressable market by:
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·
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Providing
the desalination industry with superior quality energy recovery
technologies that deliver proven, best-in-class solutions for isobaric and
centrifugal devices for both seawater and brackish reverse osmosis
applications.
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·
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Expanding
ERI’s product portfolio to offer a more complete suite of energy-saving
solutions that cover a larger footprint in the brackish and seawater
desalination markets.
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·
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Designing,
manufacturing and selling packaged solutions that integrate high pressure
pumps, circulation pumps and energy recovery devices to offer a complete
solution for a power train in a desalination
plant.
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·
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Increasing
market share with an expanded suite of products in regions where the cost
of power is low and up-front capital cost considerations take precedence
over operating costs.
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·
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Combining
the two industry-leading technologies and their comprehensive ongoing
R&D efforts to develop next generation
products.
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·
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Pursuing
new applications outside of seawater and brackish desalination, such as
natural gas and high pressure fluid processes where the centrifugal
technology has unique advantages.
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”The
acquisition of Pump Engineering and its capability to manufacture high pressure
and circulation pumps for desalination applications means ERI can now offer
clients a single-source solution for the entire power train in a desalination
plant,” said Borja Blanco, Senior Vice President of Sales at ERI. “This opens up
tremendous market opportunities for us. We are excited to expand our
worldwide reach and market penetration by combining Pump Engineering’s global
network of agents with our extremely capable direct sales team to take advantage
of the broader suite of products and solutions that this acquisition
provides.”
Pump
Engineering’s turbine technology can be applied to new and substantially larger
addressable markets outside of the water treatment markets such as natural gas and other
high pressure fluid processes. Similar to the desalination process, these
markets also have high-pressure streams where significant energy can be saved;
however they are very sensitive to cross-contamination. The turbine design
provides 100 percent isolation of the process streams making it a good fit for
these future applications.
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“We're
delighted with ERI’s validation of Pump Engineering’s technology and overall
market strategy,” stated Robert Oklejas, Founder and President of Pump
Engineering. “For the past 23 years, our employees have been dedicated to
designing a very high quality technology that offers a cost-conscious energy
saving desalination solution. Our customers around the world will benefit from
the superior array of energy recovery solutions that our combined efforts and
products will bring to the market.”
Pump
Engineering is currently organized as a limited liability
company. Its unaudited financial statements for its 2008 fiscal year
ended December 31 show that the company generated $9.3 million in revenue and
produced an operating margin of 10%. Pump Engineering expects to
generate approximately $8 to $9 million of revenue in 2009 and approximately $13
to $15 million in revenue in 2010, including the Magtaa project in Algeria
recently awarded to Pump Engineering. The estimated revenues for 2010 do not
include the potential for synergistic sales of high pressure and circulation
pumps to ERI’s OEM customers or sales into new applications outside of
desalination.
ERI will
host a conference call for investors to discuss this acquisition on Thursday,
December 3, 2009 before the market opens at 5:30 a.m. PT (8:30 a.m.
ET). The conference call will be in a "listen-only" mode for all
participants other than the investment professionals who regularly follow the
Company. The toll-free phone number for the call is 877-941-8610 or 480-629-9819
and the access code is 4189643. Callers should dial in approximately 15 minutes
prior to the scheduled start time. A telephonic replay will be available at
800-406-7325 or 303-590-3030, access code:
4189643, until Wednesday, December 17, 2009. Investors may also access the live
call or the replay over the internet at www.streetevents.com and www.energyrecovery.com.
The replay will be available approximately three hours after the live call
concludes.
About
Energy Recovery, Inc.
Energy
Recovery, Inc. (NASDAQ:ERII) designs and develops energy recovery devices that
help make desalination affordable by significantly reducing energy consumption.
Energy Recovery’s PX Pressure Exchangerä (PXä) device is a rotary
positive displacement pump that recovers energy from the high pressure reject
stream of seawater reverse osmosis systems at up to 98% efficiency. The company
is headquartered in the San Francisco Bay Area with offices in key desalination
centers worldwide, including Madrid, Shanghai, Florida and the United Arab
Emirates. For more information about Energy Recovery, Inc. and the PX
technology, please visit www.energyrecovery.com.
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Forward
Looking Statements
This
press release includes “forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements
include statements about ERI’s potential acquisition of Pump Engineering, Inc.
L.L.C., Pump Engineering’s future financial performance, ERI’s plans
to integrate Pump Engineering’s business to offer a broader array of products
and solutions to the markets it serves and the acquisition’s potential for
enhancing ERI’s competitive position and for opening up opportunities in new
markets. Because such forward-looking statements involve risks and
uncertainties, including the risks that the acquisition of Pump Engineering will
not be consummated, as the transaction is subject to certain closing conditions,
the Company's actual results may differ materially from the predictions in those
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, unsuccessful integration of the two
companies operations, delays in, or cancellation of, the construction of
desalination plants, the inability of ERI’s or Pump Engineering’s customers to
obtain project financing, delays in governmental approvals, changes in end
users’ budgets for desalination plants or the timing of their purchasing
decisions, the world economic crisis and other risks detailed in the Company's
filings with the Securities and Exchange Commission (“SEC”). All forward-looking
statements are made as of today, and the Company assumes no obligation to update
such statements. For more details relating to the risks and uncertainties that
could cause actual results to differ materially from those anticipated in our
forward-looking statements, please refer to the Company's SEC
filings.
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