General Electric to acquire Zenon Environmental Inc.
GE’s Water & Process Technologies Platform with the
PA and Oakville, Ontario (March 14, 2006) – GE Water & Process
Technologies, a unit of General Electric Company (NYSE: GE) and ZENON
Environmental Inc. (TSX: ZEN and ZEN.NV.A; OTC: ZNEVF and ZNEAF),
announced today that they have signed an agreement in connection with the
acquisition by way of Plan of Arrangement of ZENON by GE in an all cash
transaction for Cdn $24.00 per share, valuing the transaction at
approximately Cdn $760 million, or US $656 million. ZENON is a global
leader in advanced membranes for water purification, wastewater treatment
and water reuse to municipalities and industries worldwide.
its 26-year history, Zenon pioneered the use of ultrafiltration technology
for water and wastewater treatment. The technology has become the
technology of choice for water and wastewater plants, and its adaptation
is spreading rapidly throughout the world.
is a great strategic fit with GE,” said David Calhoun, GE Vice Chairman
and President & CEO, GE Infrastructure. “With the synergies we
create, we will have the potential to grow revenue in the municipal water
segment at more than 30 percent for the next several years. Its
best-in-class membrane technologies will allow GE to serve the
fast-growing ultrafiltration segment of water and wastewater treatment,
significantly expand our capabilities to help customers address pressing
water scarcity issues and play a key role in the high-growth areas of the
municipal water segment. With this terrific addition, we anticipate our
water platform growing to nearly US $2.5 billion in revenue next year.”
Benedek, Chairman and CEO of Zenon Environmental, said, “This
transaction will benefit both our customers and GE’s customers. Our
advanced membranes and talented team, combined with GE’s technology,
scale, strong global network and services expertise, will open up new
global opportunities for our ultrafiltration technology.”
advanced membranes include membrane bioreactor (MBR) and hollow fiber
technologies that offer low-cost filtration and disinfection in one step
with low energy consumption. Zenon has an extensive patent portfolio that
will enhance GE’s current water scarcity platform by providing
pre-treatment technology for reverse osmosis desalination and reuse.
Zenon’s technology in municipal water treatment will enhance GE’s
presence with advanced technology products in this large global industry.
Zenon’s technologies also will help GE provide the best
life-cycle cost reduction for customers in customized service agreements.
the terms of the agreement, GE will acquire all of the issued and
outstanding Common Shares of Zenon and the Non-Voting Class A Shares for
Cdn $24.00 in cash. Zenon option holders will be eligible to receive Cdn
$24.00 cash, less the exercise price of the respective option.
transaction is to be effected by way of statutory “Plan of
Arrangement” and will require the approval of Zenon’s security
holders. Management of Zenon
anticipates that a management proxy circular regarding the Arrangement
will be mailed to security holders by the end of March 2006, with a
meeting of the Zenon shareholders being held to approve the Plan of
Arrangement in late April or early May 2006.
Assuming successful completion of the Arrangement, GE intends to
amalgamate Zenon with a wholly owned subsidiary of GE.
Board of Directors of Zenon, following the unanimous recommendation of a
Special Committee of independent directors established to oversee the
transaction and the negotiation thereof, has unanimously approved the
Arrangement Agreement and is recommending the holders of Zenon Common and
Non-Voting Class A Shares vote in favor of the Plan of Arrangement.
Securities L.P. and J.P. Morgan Securities Inc. have acted as financial
advisers to the Zenon Board and Special Committee and have also each
provided an opinion to the Board and the Special Committee confirming the
fairness of the offer to the holders of the Common Shares and Non-Voting
Class A Shares of Zenon.
Benedek, Chairman and Chief Executive Officer, who, together with his
affiliates, owns 6,148,160 shares, has entered into a support agreement
agreeing to vote in favor of the Arrangement, subject to limited
exceptions, including the termination of the Arrangement Agreement by Zenon.
Information about the Transaction
Arrangement is subject to customary regulatory approvals, as well as to
approval by the holders of the Zenon Common Shares, Class A Non-Voting
Shares and the holders of Zenon
options and the approval of the Alberta Court.
the Arrangement Agreement, Zenon is prevented from pursuing any other
takeover proposals, subject to certain exceptions including exceptions in
connection with the fiduciary duties of the Zenon Board of Directors.
the Arrangement does not occur under certain circumstances, Zenon has
agreed to pay a break fee of three percent of the equity value of this