RANCHO CUCAMONGA, CA, Sept. 22, 2008 -- Basin Water Inc. announced that it has acquired the bioreactor and biofilter business of Shaw Environmental & Infrastructure Inc., (Shaw) for $1.5 million cash (subject to adjustment for working capital) plus the settlement of a disputed claim against Shaw for amounts Basin Water claims to be owed by Shaw. That dispute involves an ion exchange unit purchase agreement executed by Basin Water and Shaw on December 23, 2005, (2005 Purchase Agreement) which was structured as a $5 million sale of water treatment units by Basin Water to Shaw in two parts: (1) a sale of three water treatment systems in 2005 for total consideration of approximately $2.3 million and (ii) a sale of additional water treatment systems in 2006 for total consideration of approximately $2.7 million (subsequently adjusted to $2.5 million). In settling this dispute, Shaw relinquishes whatever claims to or rights it may have under the 2005 Purchase Agreement generally, and in particular to the ion exchange units that were the subject of the agreement.
In the transaction, Basin Water acquired the assets of Shaw's bioreactor and biofilter business, which include the design and supply of fluidized bed, membrane, and suspended carrier bioreactors for the treatment of groundwater and wastewater streams in industrial, municipal and federal applications. The business also includes the design and supply of biofilters for the treatment of air streams from municipalities and industry for the removal of odor-causing and other contaminants.
"We believe this transaction will further enhance our ability to treat organic contaminants in both the municipal and industrial arenas," said Basin Water President and Chief Executive Officer Michael Stark.
"By applying our business model of providing systems along with long-term service contracts to the bioreactor product lines, we expect, over time, to add a new growth element to the process design, project execution and intellectual property base that makes up the acquired business," Mr. Stark said. "Where customers with installed bioreactors so desire, we expect to provide them with long-term service contracts that guarantee performance and costs of controllable elements of operation. We also expect to provide service options to new customers going forward.
"The acquisition also will bring to Basin Water a team of approximately 20 experienced and capable engineers, scientists and design professionals who will enhance our ability to provide our full line of cost-effective, technology driven treatment systems to the market. This team developed the bio-filtration technologies that we are acquiring. They share our passion for excellence and commitment to customer service through implementation of superior technologies.
"In addition, the transaction will provide Basin Water with a significant presence in the Northeast via a facility in the Trenton, N.J. area," Mr. Stark said.
In addition, Basin Water shall have the title to and the right to resell the ion exchange treatment units that are the subject of the 2005 Purchase Agreement with Shaw. Basin Water can deploy these units very rapidly to customers whose requirements can be met by those units, the Company said.
Basin Water Inc. designs, builds and implements systems for the treatment of contaminated groundwater and industrial process water.
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