07 March 2005
07 March 2005
Envirokare Tech Inc. has executed a definitive merger agreement in which Thermoplastic Composite Design (TCD) will merge with and into Envirokare Tech Inc.'s wholly owned subsidiary, Envirokare Composites Corp. (ECC).
The transaction, which is expected to close tomorrow pending filing of a certificate of merger with the Florida and Delaware Secretaries of State, will combine all of TCD's business, including its intellectual property, assets and contracts, with ECC. The merger agreement provides for an initial payment of $2.5 million to TCD shareholders and a subsequent schedule of payments over a seven-year period which in total will amount to $15 million.
Simultaneously, Envirokare announced that ECC has executed a 50:50 joint venture agreement with NOVA Chemicals to create a new company, LRM Industries LLC, to commercialize TPF technology. Envirokare will contribute its intellectual property rights, technology, manufacturing equipment and all TPF business activities which were acquired through the merger with TCD into the joint venture, while NOVA Chemicals, a leading producer of plastics and chemicals, will contribute certain specified capital and services.
Proprietary TPF Technology enables the production of very large, long-fibre reinforced plastic composite parts at low process costs. Due to TPF's exceptional performance properties, Envirokare expects rapid and significant market penetration.
The merger between TCD and ECC and the joint venture with NOVA Chemicals provide Envirokare and NOVA Chemicals with complete ownership of TPF technology and manufacturing facilities, as well as access to world markets. ""The acquisition of TCD's business gives Envirokare, through its joint venture with NOVA Chemicals, the capability needed to rapidly exploit TPF process technology and to introduce global markets to this unique and proprietary technology,"" said Dr. John W. Verbicky, President and CEO of Envirokare. Verbicky added, ""I am extremely pleased with the creation of LRM Industries, LLC and am optimistic about its future. The combination of TPF Technology with NOVA Chemicals' marketing, licensing, product development and materials science capabilities creates a strong contender for large part applications on a worldwide basis. We are also extremely pleased that the inventor of the technology, Dr. Dale Polk, will remain involved in the new company, spearheading the continued development of improved process technology.""