Canadian company purchases Terra-Kleen
Vancouver, Canada— Adam
Sumel, president and CEO of Sonic Environmental Solutions Inc.
announced that the Company has entered into an agreement to acquire
100% of the shares of Terra-Kleen Response Group, Inc. based in
San Diego, California. Terra-Kleen operates proprietary and patented
technologies for the remediation of contaminated soil through
a solvent extraction process which removes and concentrates contaminants.
The Company has an established operating history with the Environmental
Protection Agency in the United States and has licenses in both
Japan and Australia. Terra-Kleen is privately held by founder
Alan Cash who will join the Sonic management team as president
of United States operations. The transaction will be effected
through a merger between Terra-Kleen and a newly incorporated
subsidiary of Sonic in the United States.
The total consideration for the
Terra-Kleen acquisition is a maximum of approximately US$8 million.
On closing of the acquisition, the shareholders of Terra-Kleen
will receive an initial re-payment of shareholder loans of US$488,000
and be issued Sonic common shares with a value of US$500,000 at
a minimum price of CDN$2.50 per share. A further US$500,000 in
Sonic common shares will be issued at market value six months
following the closing. The remaining consideration is based directly
on the performance of the Terra-Kleen business over the next three
years. Most of the performance payments will follow a formula
that closely approximates net income from the business, with payments
comprised of a minimum of 30% cash and the balance payable by
either cash or Sonic common shares, at Sonic’s discretion.
The acquisition is subject to
various conditions, including regulatory approval, satisfactory
completion of due diligence, and to Sonic completing an additional
financing within 120 days of signing of the Agreement.