Acquisition Further Strengthens its Position
as North America's Leading Water
Management Company
TORONTO, March 25,
2022 /CNW/ - Eddy Smart Home Solutions Ltd.
("Eddy") (TSXV: EDY) is pleased to announce it entered into
a definitive agreement on March 24,
2022 (the "Agreement") for the acquisition (the
"Transaction") of all of the issued and outstanding common
shares of Reed Controls Inc. (dba Reed
Water) ("Reed"). Closing of the transaction remains
subject to approval by the TSX Venture Exchange (the "TSXV")
and other customary closing conditions.
Pursuant to the Agreement, the total purchase price for the
Transaction will be C$7,359,600. The
total consideration (the "Share Consideration") will be paid in
common shares of Eddy at a per share price of $0.60 per share with an estimated 12,266,000
shares being issued. The Share Consideration will be subject to a
twenty-four (24) month lock-up period, provided that the Share
Consideration will be released from the lock-up requirements on the
first business day following each of the four, six, nine, twelve,
fifteen, eighteen and twenty-one month anniversaries of the closing
date, and such other terms, as may be imposed by the TSXV. The
Share Consideration will also be subject to a statutory four month
hold period.
Upon closing of the Transaction, Reed's founders Avi Yurman and Adam
Bartman will join Eddy's leadership team, and Chief
Marketing Officer
Avishai Moscovich will join the Sales and
Marketing team in a senior role as VP of Business Development.
Reed has also been granted a right to nominate a director to serve
on Eddy's board of directors (the "Board"), and Avi Yurman will be appointed as a Board
observer.
Reed developed a robust water management technology platform of
hardware & cloud software to manage water related risk,
conserve water & accelerate IoT adoption among global plumbing
manufacturers. Together with Eddy, the technology will
further enhance the solutions, creating a unified view of the
entire water infrastructure in commercial & high-rise
buildings. As a result of the Transaction, Eddy expects to be
positioned for expansion throughout North
America, protecting asset owners and insurance providers
from catastrophic leak events, the single biggest risk to these
properties.
"Reed's commercial focus in high-rise buildings fits perfectly
into our strategic direction and overall vision to become the
global leader in water management. Reed has done an incredible job
growing its business to this point with a revenue CAGR of 65% over
the past 3 years and with gross margin of ~ 50%. As part of
this transaction Reed brings in recurring revenue associated with
their current customer base and ~ $2mm in purchase orders with the
same margin profile. Reed's customer base and product suite is
complimentary and additive to ours and the Reed leadership team
will boost our overall management bench strength as Eddy continues
to grow,", said Travis Allan, CEO
& President of Eddy.
"The powerful combination of industry experts and complimentary
products will further solidify Eddy as the best-in-class market
leader, while providing our customers with the most agile, scalable
and robust platform available to better control and conserve water
in both commercial and residential properties," said Adam Bartman, Co-founder and Solution Architect
of Reed.
The Transaction is an arm's length transaction that is expected
to constitute an "expedited acquisition" pursuant to Policy 5.3 of
the TSXV. Subject to the satisfaction of such conditions, the
Transaction is expected to close within the next 45 days.
About Eddy
Eddy is a North American provider and developer of residential
and commercial smart water metering products and monitoring
services, helping property owners protect, control, and conserve
water usage by combining water sensing devices with behavioural
learning software. For more details on Eddy's products or company
information, please visit eddysolutions.com.
Cautionary notice
Investors are cautioned that any information released or
received with respect to the transactions described herein may not
be accurate or complete and should not be relied upon. Trading in
the securities of the Company should be considered highly
speculative.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Notice regarding
forward-looking statements
This press release may contain certain forward-looking
information and statements ("forward-looking information") within
the meaning of applicable Canadian securities legislation, that are
not based on historical fact, including without limitation
statements containing the words "believes", "anticipates", "plans",
"intends", "will", "should", "expects", "continue", "estimate",
"forecasts" and other similar expressions. Forward-looking
information in this press release incudes statements with respect
to Eddy's ability to complete the Transaction on the terms and
timing described herein, or at all; the ability of Eddy to obtain
the necessary approval of the TSXV; the proposed Board nominee of
Reed; and the anticipated effects of the completion of the
Transaction on Eddy and its strategic direction. Readers are
cautioned to not place undue reliance on forward-looking
information. Actual results and developments may differ materially
from those contemplated by these statements. The Company undertakes
no obligation to comment on analyses, expectations or statements
made by third-parties in respect of the Company, its securities, or
financial or operating results (as applicable). Although the
Company believes that the expectations reflected in forward-looking
information in this press release are reasonable, such
forward-looking information has been based on expectations, factors
and assumptions concerning future events which may prove to be
inaccurate and are subject to numerous risks and uncertainties,
certain of which are beyond the Company's control, including: the
risk that Eddy and Reed are unable to complete the Transaction on
the terms and timing described herein, or at all; Eddy's inability
to obtain approval from the TSXV; the Transaction not having the
anticipated beneficial effects on Eddy and its strategic direction;
and the risk factors discussed in the Company's filing statement
which are incorporated herein by reference and are available
through SEDAR at www.sedar.com. The forward-looking information
contained in this press release are expressly qualified by this
cautionary statement and are made as of the date hereof. The
Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise.
SOURCE Eddy Solutions