Mr. Sumel commented, This acquisition enables Sonic to accelerate our international market penetration and gives Sonic an established presence in the important USA market. We expect to add our PCB Sonoprocess for the destruction of PCBs to the existing Terra-Kleen extraction processes to provide a complete treatment capability for that process. The Terra-Kleen process is entirely complimentary to our own technology and gives Sonic added flexibility in meeting the entire spectrum of customer expectations with respect to cost, treatment time and space considerations. We are also delighted to add an environmental industry veteran with the management expertise and track record of Mr. Alan Cash to the Sonic executive team.
Terra-Kleen was founded in 1993 and holds patents for a non-thermal solvent extraction process which can be quickly and easily deployed on-site for the treatment of soil contaminated with pesticides, PCB, dioxins, furans and other persistent organic pollutants. Terra-Kleens technology is field proven with an excellent track record at USA Superfund sites and successful performance on remediation contracts worth over US$25 million.
Mr. Alan Cash, founder and sole owner of Terra-Kleen, stated: Terra-Kleen, combined with Sonics Sonoprocess technology, can more effectively penetrate and deploy into the global soil remediation market. Furthermore, as a combined entity we should have increased access to capital and a broader management team, which will allow us to more quickly advance the development of current and additional applications for our technologies. I am looking forward to being part of the Sonic team.
The total consideration for the Terra-Kleen acquisition is a maximum of approximately US$8 million. On Closing of the acquisition (Closing), 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.
The Sonoprocess Company
Adam R. Sumel, President & CEO