/NOT FOR DISTRIBUTION TO
Transaction to Introduce
- The Global Indoor Air Quality market is experiencing exponential growth, driven by the worldwide Covid-19 pandemic and the need for healthier air.
- Pyure's technology significantly reduces Covid-19 and other viruses, bacteria, and mold in air and on surfaces through an active
Indoor Air and Surface purification solution. - Pyure has developed a patented disruptive technology that replicates the way sunlight sanitizes the atmosphere by generating hydroxyls and diffusing natural molecules that clean all air and surfaces within a treated space.
- Pyure serves major international blue-chip B2B customers and sells portable and induct units through profitable distribution agreements with an established network of specialized distributors and channel partners.
- Global Indoor Air Quality demand is expected to grow exponentially over the next few years with a compound annual growth rate reaching
USD$22.8 Billion in 2028. - With a 15-year operating history, Pyure has developed a strong reputation with an experienced management team with industry subject matter expertise who will stay in place following closing.
- VMH will acquire Pyure for share consideration at a value of approximately
USD$250 million . - Pyure will look to complete a debt or equity financing round for at least
USD$15 million prior to closing. - The acquisition is expected to close in Q4 2022.
Pyure, which is located in
The worldwide Covid-19 pandemic brought attention to Indoor Air Quality (IAQ) and society's increased awareness and concern about IAQ has significantly increased the demand for IAQ purification solutions. Global IAQ demand is expected to grow at a double-digit compound annual growth rate (CAGR) reaching
Existing IAQ purification options of fresh air ventilation, High Efficiency Particulate (HEPA) filters, Germicidal Ultra Violet (UV), and surface cleaning with chemicals, provide limited protection against airborne pathogens and can increase energy consumption by 25% or more and also increase operating and labour costs. Pyure believes each of these options have compromises and inherent limitations relative to Pyure's technology: HEPA and other filter systems are passive approaches to purification; they only treat air that passes through them, have no effect on surfaces and restrict air flow, leading to increased energy consumption and shortened equipment life; fresh air ventilation increases energy costs and only dilutes airborne pathogens, with no effect on surfaces; chemical treatments are costly, generate air pollutants, and do not destroy airborne pathogens. In nature, the sun produces hydroxyls that destroy viruses, bacteria, mold, and pollutants. Pyure's patented UV-based technology replicates nature's hydroxyl production indoors to rapidly and effectively reduce pathogens, including the COVID-19 virus, in air and on surfaces.
VMH believes that the increasing and unmet global demand for IAQ, coupled with the absence of a dominant effective and affordable technological solution that is also energy efficient, creates a timely opportunity for Pyure's technology to quickly gain considerable worldwide market share.
Pyure is currently advancing its business strategy to sell IAQ as a service and build the world's most extensive cloud-based database of air quality data through its Internet of Things (IoT) platform and proprietary database. Pyure has upgraded its product line with wireless communication and IoT capabilities in partnership with Rockwell Automation, Inc. and PTC Inc., which, among other service capabilities, provides Pyure with a centralized IoT platform and advanced automation capabilities. The fully IoT-enabled product portfolio provides customers with real-time local and remote monitoring, diagnostics, and control capabilities, and integration with building management and HVAC management systems on a local and national scale. It also provides operators and building management systems with IAQ monitoring which can provide significant energy savings when integrated with HVAC controls. These unique advantages are expected to allow Pyure to leverage connectivity across its products and amongst its customers to accelerate subscription and consumable recurring sales.
Pyure currently focuses on commercial, institutional, and industrial end-users (B2B) primarily within
VMH believes that with the recent achievements and organizational preparations undertaken by Pyure's management, the company has reached an inflection point in its business life cycle. VMH's strong relationships and experience in the North American real estate market is expected to create new market opportunities for Pyure's technology. VMH believes that the credibility gained with being a publicly-traded company will benefit management with access to institutional and retail capital markets, a professional investor relations strategy and campaign, and exposure to large institutional real estate customers.
VMH,
The Qualifying Acquisition values Pyure at approximately
In connection with the Qualifying Acquisition, certain shareholders of Pyure and HGI, representing the holders of at least that number of Pyure shares and HGI shares, respectively, required to approve the Qualifying Acquisition, have entered into support agreements with VMH whereby, among other things, such shareholders have agreed to approve the Qualifying Acquisition and any other matter necessary for approval in connection with the Qualifying Acquisition.
Certain Pyure and HGI shareholders will be required to enter into a lock-up agreement pursuant to which they will agree not to, directly or indirectly, sell assign or transfer the New Pyure Common Shares held by them, other than in accordance with the provisions of the lock-up agreement. Similarly,
Pursuant to the Business Combination Agreement, certain of the management shareholders of Pyure have agreed to a hold back of 5% of the New Pyure Common Shares otherwise deliverable to them under the agreement as security for the limited indemnification obligations of such management shareholders to VMH under the Business Combination Agreement.
The Qualifying Acquisition is subject to certain customary closing conditions, as well as the condition that Pyure completes a debt or equity financing round of at least
The Qualifying Acquisition is intended to constitute VMH's qualifying acquisition under Part X of the
A copy of the Business Combination Agreement will be available under VMH's profile on SEDAR at www.sedar.com, which will contain further information in respect of the Qualifying Acquisition. VMH will also file a non-offering prospectus in accordance with the rules of the TSX in each of the provinces and territories of
VMH is a
Pyure is an air purification technology company located in
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects VMH's current expectations regarding future events. The words "anticipate", "could", should", "will", "expect", "intend", "may", "project" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specific forward-looking information contained in this press release includes, but is not limited to, statements with respect to the following: the completion and proposed terms of, and matters relating to, the Qualifying Acquisition, including the satisfaction of the conditions to consummate the Qualifying Acquisition, and the expected timing related thereto; the expected operations, financial results and condition of VMH following the Qualifying Acquisition; the expected benefits of the Qualifying Acquisition to VMH; and the expectations regarding trends in the air purification industry and overall market growth rates. Forward-looking information in this press release is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond VMH and Pyure's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: conditions precedent or approvals required for the Qualifying Acquisition not being obtained; there can be no assurance that the Qualifying Acquisition will be completed on the expected terms, or at all; Pyure being unable to succeed in establishing, maintaining, and strengthening its brand; Pyure being unable to protect its intellectual property; Pyure being unable to control costs associated with its operations; unfavourable economic conditions adversely affecting Pyure's operations; the continuing effects of the COVID-19 pandemic and related prophylactic measure could have a material and adverse effect on Pyure's business, financial condition, liquidity and results of operations; declines or unanticipated changes in customer demand; possible departures from the combined senior management team; integration risks associated with acquisitions; Pyure may not be able to successfully implement its business strategy on a timely basis or at all, and may be unable to manage future growth effectively; Pyure's business may be adversely affected by various operating risks common to the air purification industry, including competition from competitors who may have greater financial resources and established manufacturing, distribution and marketing capabilities; non-performance of third-party vendors and contractors; regulatory approvals and timely product launches; and market reception of the products and services; as well as the factors discussed under the heading "Risk Factors" in the investor presentation to be filed and those to be set out in the preliminary prospectus, which will be available under VMH's profile on SEDAR at www.sedar.com. VMH and its sponsors undertake no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
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