LONDON, ON, Dec. 18 /PRNewswire-FirstCall/ - Trojan Technologies Inc.
(TSX/TUV) announced today that it will acquire a 51% interest in US Peroxide,
LLC of Laguna Niguel, California. The purchase of US Peroxide expands the
range of integrated solutions Trojan provides for water and wastewater
treatment and supports Trojan's strategy for revenue growth by building on new
product solutions in existing markets.
US Peroxide is the largest North American supplier of hydrogen peroxide
(H2O2) for environmental service applications and also offers equipment and
services related to the use and monitoring of hydrogen peroxide. Hydrogen
peroxide is used for odor reduction and corrosion control in municipal
wastewater treatment applications. Trojan uses hydrogen peroxide in its
existing environmental contaminant treatment (ECT) solutions, which are
designed to destroy chemicals found in contaminated water supplies.
"US Peroxide's customer-focused strategy and product offering fits well
with our company," stated Marvin DeVries, President and CEO of Trojan
Technologies. "Our business is to deliver solutions that increases our
customers' confidence in the quality of their water. This acquisition enhances
our ability to do that by offering an integrated solution that complements our
core offerings for water treatment. It also provides Trojan with an enhanced
growth opportunity and a meaningful addition to our recurring annual revenue."
The purchase price of the initial 51% interest will be US$5.2 million, to
be paid in cash, subject to adjustment on completion of US Peroxide's audited
financial statements for the year ending December 31, 2003. In 2007 and 2009,
Trojan will purchase 34% and the remaining 15% interest, respectively,
provided certain performance targets are achieved. The valuation of these
subsequent purchases will be based on US Peroxide's performance. The initial
purchase will close on January 5, 2004 subject to obtaining certain consents
and normal conditions. The net impact on Trojan's financial performance is
expected to be neutral to earnings in 2004 and accretive to earnings in 2005
US Peroxide is well aligned with Trojan's existing markets
Trojan's ECT products require the use of hydrogen peroxide in conjunction
with UV to treat chemically contaminated water supplies, while simultaneously
providing disinfection. This process, known as UV-Oxidation, has been utilized
in approximately 90% of the ECT contracts won to date. With the integration of
hydrogen peroxide equipment and its ongoing supply into current ECT product
offerings, Trojan can now offer turnkey ECT solutions, which provide customers
with the ongoing performance assurance. This bundled solution is expected to
enhance market growth and further strengthen Trojan's market share position in
the ECT market.
The companies have been working together to develop advanced treatment
solutions for both municipal drinking water and wastewater applications over
the past year. This acquisition formalizes this working relationship. By
offering municipal wastewater plants a joint UV and hydrogen peroxide
solution, municipal wastewater customers will be able to replace the use of
chlorine to solve odor and corrosion problems as well as meet disinfection
requirements. The companies expect that this will result in increased sales of
both UV and hydrogen peroxide solutions.
US Peroxide's sales will be enhanced by leveraging Trojan's strong
Trojan sells its municipal water treatment solutions through an
established, global network of manufacturer's representatives. Through this
channel, US Peroxide can grow its revenue by offering hydrogen peroxide
solutions to an expanded market.
Trojan's recurring annual revenue will increase
US Peroxide's revenue stream includes the long-term supply of hydrogen
peroxide to its customers. This revenue stream will continue to increase as
the customer base increases. The acquisition will further increase Trojan's
annual revenue from the supply of after-market-sales and service.
"We are happy to join forces with Trojan," stated Scott Duggan, President
and founder of US Peroxide. "Trojan's purchase of US Peroxide provides access
to new distribution channels and resources that will enable us to reach our
About US Peroxide
US Peroxide (www.H2O2.com), founded in 1997 in Laguna Niguel, California,
is an environmental technology and full-service provider, providing cost-
saving environmental solutions to both the municipal and industrial markets,
and is the single largest North American direct supplier of hydrogen peroxide
(H2O2) for environmental service applications. In addition to supplying
hydrogen peroxide, the company sells equipment and services related to the use
and monitoring of hydrogen peroxide, primarily at wastewater treatment plants.
The company employs approximately 25 staff and is expected to generate annual
revenue of approximately US$8.5 million in 2003.
About Trojan Technologies
Trojan Technologies (www.trojanuv.com) designs, manufactures and sells UV
systems for municipal wastewater and drinking water facilities, as well as for
the industrial, commercial and residential markets. The company also provides
UV treatment for the removal of certain chemicals from water.
With over 3,500 municipal facilities in more than 25 countries using its
technology, Trojan has the largest installed base of UV systems in the world.
Headquartered in London, Ontario, Canada, the company also has offices in the
U.K., Germany, Netherlands, Norway, Spain, and the U.S. Its shares are listed
on The Toronto Stock Exchange under the trading symbol TUV.
SOURCE Trojan Technologies Inc.