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BluMetric Environmental Inc. — M&A Activity 2024
Oct 2, 2024
43311_rns_2024-10-02_239002f5-4e39-4bbb-bd40-9c5ff9505994.pdf
M&A Activity
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BLUMETRIC ENVIRONMENTAL INC. MATERIAL CHANGE REPORT
Item 1. Name and Address of Company
The name of the reporting issuer is BluMetric Environmental Inc. (the “ Issuer "). Its head office is located at 1682 Woodward Dr., Ottawa, Ontario, K2C 3R8, Canada.
Item 2. Date of Material Change
The material change occurred on September 23, 2024.
Item 3. News Release
The Issuer disseminated a news release via Newsfile Corp. on September 24, 2024.
Item 4. Summary of Material Changes
On September 24, 2024, the Issuer announced the acquisition of all the membership interest in Gemini Water, LLP.
Item 5. Full Description of Material Changes
See attached new release.
Item 6. Reliance on Subsection 7.1(2) of National Instrument 51-102 Information
The Issuer is not relying on sub-section 7.1(2) of National Instrument 51-102 or the equivalent provisions of the securities legislation in other jurisdictions governing the Issuer for the filing of this report.
Item 7. Omitted Information
No information has been omitted.
Item 8. Executive Officers
For further information, please contact Dan Hilton, CFO of the Issuer, at [email protected] or +1 (613) 839-3053.
Item 9. Date of Report
DATED at Ottawa, Ontario this 2[nd] day of October 2024.
BluMetric�Announces�Acquisition�of�U.S.Based�Gemini�Water�to�Expand�CleanTech Portfolio�and�Geographic�Footprint
Ottawa,�Ontario--(Newsfile�Corp.�-�September�24,�2024)�-�BluMetric�Environmental�Inc.�(TSXV: BLM)�("BluMetric"�or�"the�Company"),�a�full-service�environmental�consulting�and�engineering cleantech�firm,�announced�its�acquisition�of�U.S.-based�Gemini�Water,�LLC�("Gemini�Water"),�marking the�Company's�cleantech�water�portfolio�expansion�and�entry�into�the�Caribbean�and�U.S.�water�markets (the�"Acquisition").
Under�the�terms�of�the�membership�interest�purchase�agreement�executed�September�23,�2024, BluMetric�acquired�100%�of�the�membership�interest�in�Gemini�Water�from�GSWS�Holdco�Inc.�(the "Vendor")�in�exchange�for�a�purchase�price�of�US$5.05�million�(the�"Purchase�Price").�At�closing,�the Company�paid�out�from�its�working�capital�and�operating�line,�an�initial�amount�of�US$3.0�million (CA$4.1�million)�and�issued�2,352,500�Common�Shares�in�the�Capital�of�the�Company�to�the�Vendor (the�"Closing�Equity�Consideration").�The�remaining�balance�of�US$1.05�million�will�be�paid�through an�earn-out�over�the�next�three�years�in�equal�amounts�which�are�contingent�on�revenue�growth,�gross margin,�and�EBITDA�generation�targets.�The�Vendor�is�also�entitled�to�additional�earn�out�of�US$50,000 on�each�US$1.0�million�annual�revenue�growth�in�excess�of�US$7.0�million�annual�revenue�for�up�to US$3.0�million.
Founded�in�2015�in�Gainesville,�Florida,�Gemini�Water�designs,�builds,�installs,�and�commissions�largescale�desalination�and�wastewater�treatment�systems�using�membrane-based�technologies.�Gemini Water�systems�have�7�million�gallons�per�day�(GPD)�of�potable�and�wastewater�treatment�capacity across�22�locations�in�the�Caribbean�and�Texas.
"Today�we�progress�our�long-term�growth�strategy�by�expanding�our�cleantech�product�line�and geographic�footprint�into�the�U.S.�and�Caribbean�markets,"�said�Scott�MacFabe,�CEO�of�BluMetric. "This�acquisition�improves�our�market�accessibility�by�covering�a�combined�population�almost�ten�times the�size�of�Canada's�in�regions�that�are�significantly�more�water�stressed.�Gemini�Water�has�developed an�impressive�solution�for�managing�water�shortages�within�complementary�customer�verticals�from private�developments,�and�government�infrastructure�to�the�leisure�market�supporting�resorts�and international�cruise�lines."
For�the�twelve-month�period�ending�June�30,�2024,�based�on�unaudited�figures�currently�available, Gemini's�revenues�stood�at�approximately�US$7.3�million�(CA$9.8�million)�with�historic�EBITDA margins[1] �exceeding�10%.�In�addition,�Gemini�Water�is�currently�in�St.�Kitts�and�Nevis�to�design,�build, and�install�a�two�million�gallons�per�day�(GPD)�desalination�plant.�There�is�a�remaining�balance�of US$9.3�million�(CA$12.5�million)�on�the�contract,�and�the�project�is�expected�to�be�completed�by�the�end of�calendar�year�2025.�The�Company�is�not�assuming�any�long-term�debt�of�Gemini�on�Closing.
BluMetric�believes�the�strategic�nature�of�this�acquisition�provides�the�following:
-
Ability�to�diversify�its�cleantech�customer�base�into�new�industrial�and�commercial�applications Backfill�the�longer�sales�cycles�observed�in�the�Military�segment�with�the�shorter�sales�cycles�in Gemini�Water's�client�base
-
Share�know-how�and�proprietary�expertise�to�mutually�strengthen�both�companies'�service offerings
-
Jump�start�the�establishment�of�a�manufacturing�presence�in�the�U.S.�to�take�advantage�of potential�American�demand�for�BluMetric's�military�technologies
-
Leverage�financial�and�personnel�resources�to�help�Gemini�Water�execute�on�its�accelerating order�backlog
The�acquisition�of�Gemini�is�an�arm's�length�transaction,�and�the�issuance�of�the�Closing�Equity Consideration�will�not�result�in�the�creation�of�a�new�Insider.�No�finder's�fee�was�payable�by�the Company.
Pursuant�to�the�Company's�Board�compensation�policy,�BluMetric�has�granted�options�of�150,000 common�shares�to�an�Executive�of�the�Company.�These�options�are�granted�effective�September�24, 2024,�vest�over�two�years,�and�are�exercisable�into�common�shares�of�BluMetric�at�a�price�equivalent�to the�5-day�VWAP�of�$0.60�per�share�for�a�period�of�seven�years.
About�BluMetric�Environmental�Inc.
BluMetric�Environmental�Inc.�is�a�publicly�traded�environmental�consulting�and�engineering�company�with expertise�across�professional�and�trade�disciplines�and�technologies�that�allow�for�the�design, fabrication�and�delivery�of�sustainable�solutions�to�environmental�and�water�challenges.�BluMetric�has more�than�200�employees�operating�in�ten�offices�and�over�45�years�of�expertise.�Headquartered�in Ottawa,�Ontario,�BluMetric's�team�of�industry�experts�serves�Commercial�and�Industrial,�Military,�Mining and�Government�clients.
For�more�information,�visit www.blumetric.ca�or�please�contact:
Scott�MacFabe,�CEO BluMetric�Environmental�Inc. Tel:�1-877-487-8436�x242 Email: [email protected]
Dan�Hilton,�CFO BluMetric�Environmental�Inc. Tel:�1-877-487-8436�x550 Email: [email protected]
Brandon�Chow,�Principal�&�Founder Panolia�Investor�Relations�Inc. Tel:�1-647-598-8815 Email: [email protected]
Forward-Looking�Statements
Some�of�the�statements�in�this�press�release,�including�those�relating�to�the�Company's�quarterly�and annual�results,�future�products,�opportunities�and�cost�initiatives,�strategies,�and�other�statements�that are�predictive�in�nature,�that�depend�upon�or�refer�to�future�events�or�conditions,�or�that�include�words such�as�"expects",�"anticipates",�"intends",�"plans",�"believes",�"estimates",�or�similar�expressions,�are forward-looking�statements�within�the�meaning�of�applicable�Canadian�securities�laws.�Forward-looking statements�include,�without�limitation,�the�information�concerning�possible�or�assumed�future�results�of operations�of�the�Company.�These�statements�are�not�historical�facts�but�instead�represent�only�the Company's�expectations,�estimates,�and�projections�regarding�future�events.�By�their�nature,�forwardlooking�statements�require�us�to�make�assumptions�and�are�subject�to�inherent�risks�and�uncertainties. We�caution�readers�of�this�news�release�not�to�place�undue�reliance�on�our�forward-looking�statements as�a�number�of�factors�could�cause�actual�results�or�conditions�to�differ�materially�from�current expectations.�Please�refer�to�the�risks�set�forth�in�the�Company's�most�recent�annual�MD&A�and�the Company's�continuous�disclosure�documents�that�can�be�found�on�SEDAR+�at www.sedarplus.ca.�The Company�does�not�intend,�and�disclaims�any�obligation,�except�as�required�by�law,�to�update�or�revise any�forward-looking�statements�whether�as�a�result�of�new�information,�future�events�or�otherwise.
Neither�the�TSX�Venture�Exchange�nor�its�Regulation�Services�Provider�(as�that�term�is�defined�in�the policies�of�the�TSX�Venture�Exchange)�accepts�responsibility�for�the�adequacy�or�accuracy�of�this release.
1�Non-IFRS�Measure
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To�view�the�source�version�of�this�press�release,�please�visit https://www.newsfilecorp.com/release/224322