Pure Technologies announces acquisition of Electromechanical Technologies Inc.

The base purchase price is US$3,000,000 payable in cash. There is provision for additional payments of up to US$4,000,000 based on a percentage of revenue recognized from the purchased technologies to the end of 2013. Additional consideration cannot exceed US$2,000,000 in any year. Any additional payments will be paid approximately 75% in cash and 25% in Pure’s common stock.

 

Commenting on the transaction, Jack Elliott, Pure’s President and COO, said:

“The ground-breaking extra-high resolution magnetic flux leakage (XHR-MFL) systems developed by EMTEK will immediately position Pure as the industry leader in condition assessment of ferrous water and wastewater pipelines. Conventional MFL is a well established technique for inspecting oil and gas pipelines; however the internal cement mortar lining common in water pipelines has always created challenges. EMTEK’s patented technology has overcome these challenges.

 

“While the majority of our growth to date has come from the inspection, condition assessment and monitoring of prestressed concrete pressure pipelines, this type of pipe represents less than five percent of the total installed base of pressure pipe around the world. The EMTEK technology, opens up a much larger available market to us, and complements our SmartBall® and Sahara® solutions for leak detection and condition assessment, which are applicable to all types of pressure pipe.

 

“In the oil and gas sector, we will now be able to package the EMTEK system with our unique SmartBall leak detection system, thus providing the only combined integrity and pinhole-leak detection capability available on the market. Recent high-profile oil and gas pipeline leaks in North America have resulted in increasing regulatory and political pressure on operators to upgrade their leak detection systems. We have already seen increasing interest in our SmartBall system and we expect our enhanced offering to accelerate our growth in this sector.

 

“EMTEK’s commitment to innovative non-destructive testing systems fits well with Pure’s aggressive R&D program and the patents acquired with the transaction will strengthen our already comprehensive IP portfolio. EMTEK’s solutions will be delivered through our regional offices in the Americas, Middle East and Australia; through our Hong Kong joint venture in greater China; and through selected licensees.”