GE Water & Process Technologies (www.gewater.com) signed a deal to acquire Zenon Environmental Inc. (www.zenon.com), a Canada-based provider of ultrafiltration for water and wastewater treatment, in an all cash transaction estimated at approximately $656 million. Through the acquisition, GE expects to grow revenue in the municipal water segment at more than 30 percent over the next several years.
GE intends to use Zenon’s membrane technologies to serve the ultrafiltration segment of water and wastewater treatment market, significantly expanding its capabilities to help customers address pressing water scarcity issues and better serve high-growth areas in the municipal water segment. GE believes the acquisition will help it achieve $2.5 billion in revenue in the water treatment market in 2007.
Zenon’s membranes include membrane bioreactor (MBR) and hollow-fiber technologies that offer low-cost filtration and disinfection with low energy consumption. ZENON has an extensive patent portfolio that will enhance GE’s current product offering by providing pretreatment technology for reverse osmosis desalination and reuse. Zenon’s technology in municipal water treatment is also expected to enhance GE’s presence with advanced technology products in the global water treatment industry.
Under the terms of the agreement, GE will acquire all of the issued and outstanding common shares of Zenon and the nonvoting 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.
The transaction is to be effected by way of statutory "Plan of Arrangement" and will require the approval of Zenon’s security holders.
