Press release from CNW Group
WaterFurnace Renewable Energy, Inc. Announces Acquisition in Australia
Sunday, January 23, 2011
WaterFurnace Renewable Energy, Inc. Announces Acquisition in Australia13:06 EST Sunday, January 23, 2011FORT WAYNE, Indiana, Jan. 23 /CNW/ - WaterFurnace Renewable Energy, Inc. [WFI:TSX] announces that it has acquired (the "Acquisition") the fixed assets and technology of Hyper Engineering Pty located in New South Wales, Australia pursuant to a purchase agreement dated January 21, 2011 between, among others, WaterFurnace, Hyper Engineering, Eco Engineering Pty and John Thomas Reay, for an aggregate purchase price of US$2,788,436. Hyper Engineering designs and builds devices that limit the inrush current that electric motors draw upon start up. By reducing inrush current the life of electric motors is extended, but most importantly, local electric power quality is improved and annoying light flicker is eliminated.WaterFurnace plans to expand the global marketing and sales of this device. WaterFurnace also plans to incorporate technology developed by Hyper Engineering into the design of its core heat pump products. On a larger scale, this technology has the potential to reduce stress on the electric utility infrastructure and make those systems more efficient. Management believes that the Acquisition will have a positive impact on revenues and profitability in the medium and long-term.Pursuant to the Acquisition, WaterFurnace will satisfy the purchase price by issuing 81,467 common shares (the "WaterFurnace Shares") and paying US$788,436 in cash. WaterFurnace has also entered into a consulting agreement with Eco Engineering to provide WaterFurnace technical sales and application support, as well as to assist with new product development efforts. Eco Engineering is owned by John Reay, the seller of Hyper Engineering. WaterFurnace has incorporated the assets into two new wholly owned Australian subsidiaries. WaterFurnace plans to continue Hyper Engineering's operations with the same employee base and facility. WaterFurnace International Asia Pacific Pty was incorporated to assist with WaterFurnace's international sales efforts.The issuance of the WaterFurnace Shares is subject to the approval of TSX. TSX has accepted notice of WaterFurnace's intention to issue the shares in connection with the Acquisition, but will not give approval of such issue until it receives confirmation of the details of the final purchase agreement and a legal opinion.The WaterFurnace Shares will be subject to a regulatory four and a half month hold period commencing on their date of issue.More Information: WaterFurnace designs, manufactures and distributes geothermal heat pumps. The geothermal units use the renewable solar energy stored just below the surface of the earth to dramatically reduce the energy consumed by buildings for heating, cooling and hot water.WaterFurnace Renewable Energy, Inc. is traded in both Canadian dollars and U.S. dollars on the Toronto Stock Exchange under the symbol WFI for Canadian dollars and WFI.U for U.S. dollars.Forward-Looking Information Cautionary NoticeCertain statements in this release constitute forward-looking statements within the meaning of applicable Canadian securities laws. Forward-looking statements include statements as to growth opportunities and the potential benefits associated with WaterFurnace's acquisition of Hyper. Readers are cautioned not to place undue reliance on such statements. Investors should not rely solely on this information to make investment decisions. These statements are subject to certain assumptions, risks and uncertainties, including the following: uncertainty regarding the future sales performance and revenue associated with assets and technology acquired; WaterFurnace's ability to successfully market the acquired technology; the risk that expected synergies resulting from the Acquisition will not materialize; and the risk of incurring unexpected costs integrating the assets and technology acquired from Hyper. In addition, WaterFurnace's sales are related to the cost and stability of electricity, fuel oil, propane and natural gas. Federal, state and provincial building codes and energy incentives can also impact sales. WaterFurnace is subject to standard risks associated with most companies, such as normal competitive pressures. These and other risks could cause WaterFurnace's actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Other risk factors can be found in WaterFurnace's Annual Information Form dated March 11, 2010 and other public documents filed by WaterFurnace with Canadian securities regulatory authorities. WaterFurnace assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.For further information: Additional information about the Company and its products is available on the Company's website: www.waterfurnace.com. Or call (260) 478-5667 and ask for investor relations.