Item 7.01 Regulation FD Disclosure
As previously reported, in February 2016, Consolidated Water Co. Ltd. (the
"Company"), through its wholly-owned subsidiary, Consolidated Water U.S.
Holdings, Inc. ("CW-Holdings"), entered into a stock purchase agreement (the
"Purchase Agreement") with Aerex Industries, Inc. ("Aerex") and Thomas Donnick,
Jr. ("Donnick"). Aerex is a custom and specialty manufacturer of water
treatment-related systems and products and provides design, engineering,
management, operating and other services applicable to commercial, municipal and
industrial water production.
Pursuant to the terms of the Purchase Agreement, CW-Holdings purchased a 51%
ownership interest in Aerex for an aggregate purchase price of approximately
$7.7 million. CW-Holdings also acquired from Donnick an option (the "Call
Option") to compel Donnick to sell, and granted to Donnick an option to require
CW-Holdings to purchase, his 49% ownership interest in Aerex to CW-Holdings at a
price based upon the fair market value of Aerex at the time of the exercise of
the Call Option.
On January 24, 2020, as a result of CW-Holdings' exercise of the Call Option,
CW-Holdings purchased from Donnick his remaining 49% ownership interest in Aerex
for an aggregate purchase price of $8,500,000. The purchase price was based upon
the fair market value of Aerex as agreed to between CW-Holdings and Donnick.
After giving effect to the purchase, CW-Holdings owns 100% of the outstanding
capital stock of Aerex.
Aerex generated income from operations of approximately $2.0 million on revenue
of approximately $10.5 million for the nine months ended September 30, 2019.
Aerex incurred a loss from operations of ($147,906) on revenue of approximately
$7.3 million for the year ended December 31, 2018.
On January 29, 2020, the Company issued a press release announcing the
consummation of the transaction described above, a copy of which is attached to
this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by
reference.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to liabilities under that
section, and shall not be deemed to be incorporated by reference into the
filings of the Company under the Securities Act of 1933, as amended, regardless
of any general incorporation language in those filings.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release dated January 29, 2020.
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