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H2O Innovation Announces Two Northeast US Acquisitions Solidifying its Operation & Maintenance Business Line


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All quantities in Canadian {dollars} until in any other case said.

QUEBEC CITY, Dec. 15, 2021 (GLOBE NEWSWIRE) — (TSXV: HEO) – H 2 O Innovation Inc. (“H 2 O Innovation” or the “Corporation”) is proud to announce it executed this morning all of the paperwork associated to the acquisition of JCO, Inc. (“JCO”) and of Environmental Consultants, L.L.C. (“EC”, and along with JCO, the “Targets”) from arm’s-length third events. Each of the Targets presents full operation, upkeep and administration (“O&M”) providers to municipal and industrial water and wastewater purchasers from the identical area, the Hudson Valley Region within the State of New York.

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The acquisition of the Targets, which had been owned and operated individually, enhances H 2 O Innovation’s present enterprise actions within the Northeast of the United States and solidifies its place within the North American O&M market. With greater than 70 years of mixed expertise, H 2 O Innovation, JCO and EC place themselves as important gamers within the O&M sector within the State of New York with a complete of almost 200 clients.

JCO and EC each function some sizeable industrial services which is able to develop the commercial buyer base of H 2 O Innovation’s O&M enterprise line. Industrial streams are sometimes extra advanced to deal with and will result in alternatives for H 2 O Innovation’s WTS enterprise line to supply added worth membrane options which might finally decrease the working bills for the shoppers. It is anticipated that this consolidation will foster synergies as the shoppers presently served by H 2 O Innovation, JCO, and EC will probably be supplied value-added providers that ought to probably generate new enterprise alternatives, given the Corporation’s world breadth of know-how, its operation experience, and its aftermarket assist. Additionally, JCO and EC function collectively quite a few membrane vegetation which will profit from the specialty chemical substances of H 2 O Innovation; which specialty chemical substances enable membrane water therapy facility to run longer with out cleansing, thus contributing to decrease working bills.

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“These two O&M acquisitions are aligned with our 3-Year Strategic Plan. They will allow us not to only expand our O&M platform in the State of New-York, which is the 4 th largest populated state in the USA with 19.3 M inhabitants 1 , but also to provide a unique opportunity to deploy our membrane process expertise and our related specialty products to multiple municipal and industrial customers all along the Hudson Valley Region. We foresee multiple sales synergies between our different business lines, including JCO and EC, which will contribute to solidify customer retention, thus recurring revenues. On top of that, we are welcoming with open arms an experienced team of approximately 120 employees within the H 2 O Innovation family bringing the total number of employees to nearly 915. Financially, both transactions are expected to be immediately accretive to H 2 O Innovation’s net earnings and EBITDA. On a pro-forma basis, these acquisitions are bringing the Corporation one step closer to its EBITDA target set in the 3-year Strategic Plan”, stated Frédéric Dugré, President and Chief Executive Officer of H 2 O Innovation.

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The buy worth for these acquisitions, which can’t be disclosed for aggressive causes, will probably be happy from money readily available, the lately amended credit score facility and by the issuance of an mixture of 1,107,733 H 2 O Innovation’s frequent shares, at a worth of $2.375 per share. A contingent consideration is payable twelve (12) months after closing topic to achievement of sure income goals by every of the Targets. The frequent shares issued are topic to a statutory resale restriction till April 15, 2022. The transactions are accomplished with minimal dilution for the shareholders, and the shares of H 2 O Innovation have been issued to facilitate the mixing of the sellers and create an alignment with the marketing strategy of the Corporation, which is to maximise gross sales synergies and leverage the gross sales group.

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For the twelve-month interval ending on September 30, 2021, the Targets generated an mixture of US$13.5 M ($17.0 M) 2 in revenues with, on a consolidated foundation, internet earnings of US$ 1.1 M ($1.3 M) and an adjusted EBITDA 3 of US$2.6 M ($3.3 M).

“I have never been prouder to bring our clients and workforce an incredible opportunity to be part of something bigger. Our small family-owned company has spent over 30 years growing, learning, and servicing our local communities and environment. We all now have the chance to benefit in the vision that H 2 O Innovation is bringing to the Hudson Valley. H 2 O Innovation’s philosophy on focusing on the individual’s growth, and the client’s level of service, is what allows the culture of our newfound family to remain strong”, said Roy Rysinger, Vice President of JCO, Inc.

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“I am really excited about the future opportunities for our employees which will be created as we become part of the H 2 O Innovation’s family. I am also excited about the enhanced services and treatment technologies for our customers that H 2 O Innovation will bring to the Hudson Valley. H 2 O Innovation’s core values and culture are well-aligned with the ideology and values on which Environmental Consultants has been built over time: focusing on the employees is an investment in the business”, added Steven Mance, Vice President of Environmental Consultants, L.L.C.

H 2 O Innovation Conference Call
Frédéric Dugré, President and Chief Executive Officer, and Marc Blanchet, Chief Financial Officer, will maintain an investor convention name to debate the acquisition of the Targets in additional particulars at 8:45 a.m. Eastern Time on Wednesday, December 15, 2021.

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To entry the decision, please name 1-888-440-2131 or 438-803-0534, 5 to 10 minutes previous to the beginning time. Presentation slides for the convention name will probably be made accessible on the Corporate Presentations web page of the Investors part of the Corporation’s web site.

Prospective Disclosures
Certain statements set forth on this press launch relating to the operations and the actions of H 2 O Innovation in addition to different communications by the Corporation to the general public that describe extra typically administration goals, projections, estimates, expectations or forecasts could represent forward-looking statements inside the that means of securities laws. Forward-looking statements concern evaluation and different data based mostly on forecast future outcomes, efficiency and achievements and the estimate of quantities that can’t but be decided.

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Those forward-looking statements, based mostly on the present expectations of administration, contain quite a few dangers and uncertainties, identified and unknown, which can end in precise and future outcomes, efficiency, and achievements of the Corporation to be materially completely different than the stated forward-looking statements, such because the Corporation’s capacity to: (i) profitably handle further companies, (ii) efficiently combine these new companies with out substantial bills, delays or different operational or monetary difficulties, (iii) obtain anticipated revenues and earnings, and (iv) generate synergies and cross-selling alternatives. Information in regards to the danger elements to which the Corporation is uncovered is supplied within the Annual Information Form dated September 27, 2021 accessible on SEDAR (www.sedar.com).

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About H 2 O Innovation  
Innovation is in our identify, and it’s what drives the group. H 2 O Innovation is a whole water options firm centered on offering best-in-class applied sciences and providers to its clients. The Corporation’s actions depend on three pillars: (i) Water Technologies & Services (WTS) applies membrane applied sciences and engineering experience to ship gear and providers to municipal and industrial water, wastewater, and water reuse clients, (ii) Specialty Products (SP) is a set of companies that manufacture and provide a whole line of specialty chemical substances, consumables and engineered merchandise for the worldwide water therapy business, and (iii) Operation & Maintenance (O&M) gives contract operations and related providers for water and wastewater therapy techniques. Through innovation, we attempt to simplify water. For extra data, go to www.h2oinnovation.com.

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Neither TSX Venture Exchange nor its Regulation Services Provider (as that time period is outlined within the insurance policies of the TSX Venture Exchange) nor the NYSE Euronext Growth Paris accepts duty for the adequacy or accuracy of this launch.

Source:
H 2 O Innovation Inc.
www.h2oinnovation.com

Contact:
Marc Blanchet
+1 418-688-0170
[email protected]

1 As per the web site https://www.statista.com .
2 Exchange charge: 1.2642
3 Adjusted EBITDA is a non-IFRS monetary measure and is utilized by the Corporation to measure the efficiency. EBITDA means earnings earlier than finance prices – internet, earnings taxes, depreciation and amortization. The definition of adjusted EBITDA excludes bills in any other case thought-about in internet earnings based on Generally Accepted Accounting Principles, specifically the unrealized trade (beneficial properties) losses, the change in honest worth of contingent issues and the stock-based compensation prices. These gadgets are non-cash gadgets and don’t have an impression on the working and monetary efficiency of the Corporation. Management has additionally elected to exclude the acquisition and integration prices, as they aren’t immediately linked to the operations. The definition of adjusted EBITDA could differ from these utilized by different corporations.

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