Media update, page-11

http://www.*********.com.au/victor_bivell.asp?a=AV&ai=44272
Emefcy is newer to China than Phoslock, but its ambitions are just as big. The company is targeting the treatment of municipal rural wastewater and industrial wastewater. It is offering small low cost onsite treatment plants that are able to substitute for large fixed plants. It has a manufacturing plant in Israel and is building a factory in China to reduce costs in its key market.
Over the past year it signed partnership and distribution agreements with five Chinese firms, and last month it announced it would build its third commercial project in the country.
In March this year Emefcy entered a partnership with RWL Water, a New York based water, wastewater and waste-to-energy company to accelerate their penetration into China. Last month the companies went a big step further and announced they will merge to form Fluence Corporation. They believe Fluence can be a global leader in distributed water treatment solutions.
Emefcy’s Membrane Aerated Biofilm Reactor (MABR) technology will be the main wastewater offering while RWL brings its anaerobic digestion and reverse osmosis technologies as well as its service offerings in system design, construction and deployment. RWL Water provides solutions for desalination, water, wastewater, waste-to-energy, and water recycling. It has designed and built over 7,000 installations in over 70 countries.
Fluence will target more markets than Emefcy was able to do and these will include the municipal, commercial, industrial, mining, oil and gas, power, and food and beverage sectors.
The companies said that combined they would have made revenues of US$62 million ($83 million) in 2016 and they anticipate combined sales will be over US$90 million ($120 million) for calendar 2017. In this regard, RWL is the major contributor. However, neither company was profitable in 2016.
If shareholders approve the merger, Emefcy will issue RWL Water’s owner, Ronald Lauder, with 100.5 million new shares. Mr Lauder or his controlled entity will invest US$20 million ($27 million) in additional Emefcy shares at 85 cents per share. Following the merger, Emefcy shareholders would own 66 per cent of Fluence and Mr Lauder would own 34 per cent.
The deal looks good for both parties. Mr Lauder will get potential liquidity when the two year escrow period is over. Emefcy will retain its ASX listing, and gets a much bigger business plus $27 million in cash to fund its growth.
While Emefcy’s Richard Irving will remain as executive chairman, there will be management changes. Henry Charrabé, president and chief executive of RWL Water, will become Fluence's managing director and chief executive; and Philippe Laval, RWL's chief operating officer, will become Fluence’s chief operating officer. Eytan Levy, co-founder and chief executive of Emefcy, and Ronen Schechter, co-founder of Emefcy, will become president - Products & Innovation and chief technology officer respectively. Fluence will be headquartered in New York.
Mr Charrabé said “The combined company will provide packaged treatment plants with competitive capital cost, rapid deployment capability and economical operating costs. The distributed treatment model enables all communities worldwide in remote or developing regions to have the access to clean water and sanitation they deserve, at a price they can afford, while also offering a compelling model to the developed world.”
But China is the big prize. As Fluence, the company will offer turnkey solutions that it hopes will accelerate the deployment of rural wastewater treatment plants.