0001628280-18-004263.txt : 20180413 0001628280-18-004263.hdr.sgml : 20180413 20180413164816 ACCESSION NUMBER: 0001628280-18-004263 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180413 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180413 DATE AS OF CHANGE: 20180413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Evoqua Water Technologies Corp. CENTRAL INDEX KEY: 0001604643 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-38272 FILM NUMBER: 18754819 BUSINESS ADDRESS: STREET 1: 210 SIXTH AVENUE CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 724-772-0044 MAIL ADDRESS: STREET 1: 210 SIXTH AVENUE CITY: PITTSBURGH STATE: PA ZIP: 15222 FORMER COMPANY: FORMER CONFORMED NAME: EWT Holdings I Corp. DATE OF NAME CHANGE: 20140403 8-K 1 italy8-kdocument.htm 8-K Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9, 2018
EVOQUA WATER TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)

Delaware
 
001-38272
 
46-4132761
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification Number)

210 Sixth Avenue
Pittsburgh, Pennsylvania
 
15222
(Address of principal executive offices)
 
(Zip code)
Registrant’s telephone number, including area code: (724) 772-0044
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))






Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o







Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 9, 2018, WTG Holdings Coöperatief U.A. (“WTG”), a wholly-owned subsidiary of Evoqua Water Technologies Corp. (the “Company”), completed the sale of 100% of the corporate capital of Evoqua Water Technologies S.r.l., which includes the Company’s former operations in Italy (the “Transaction”), to Giotto Water S.r.l. (“Giotto”). The aggregate purchase price paid in cash by Giotto in the Transaction was €350,000, subject to certain earn-out adjustments to be paid by Giotto in connection with the realization of specified tax benefits relating to previous years.

As previously disclosed, WTG entered into a Quota Sale and Purchase Agreement dated April 3, 2018 (the “Agreement”) with Giotto in respect of the Transaction, and, in a separate transaction, Evoqua Water Technologies Ltd., a wholly-owned subsidiary of the Company, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which Giotto will have exclusive rights to market and sell the Company’s Memcor ultrafiltration and Membrane Bioreactor products in select territories throughout Europe.

The foregoing does not constitute a complete summary of the Agreement or the Transaction. Reference is made to the Agreement, which was attached as exhibit 2.1 to the Form 8-K filed by the Company on April 6, 2018 and incorporated by reference herein.
Item 8.01. Other Events.
On April 11, 2018, the Company issued a press release, a copy of which is attached as Exhibit 99.2 hereto and incorporated herein by reference, announcing Company’s entry into the Distribution Agreement and the closing of the Transaction.


Item 9.01. Financial Statements and Exhibits.
(a) Not applicable.
(b) Pro Forma Financial Information.
The following unaudited pro forma financial information of the Company, which gives effect to the Transaction, is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference:
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2017
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended September 30, 2017
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended December 31, 2017
(c) Not applicable.
(d) Exhibits:
 
 
 
Exhibit No.
 
Description
 
 
 
2.1*
 
Quota Sale and Purchase Agreement between Giotto Water S.r.l. and WTG Holdings Coöperatief U.A., dated April 3, 2018 (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed April 6, 2018).*
 
 
99.1
 
 
 
 
99.2
 
*Certain annexes to the Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Commission a copy of any omitted annex upon request.







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
Date: April 13, 2018
 
 
 
 
 
EVOQUA WATER TECHNOLOGIES CORP.
 
 
 
 
 
 
 
 
By:
 
/s/ Benedict J. Stas
 
 
 
 
 
 
Benedict J. Stas
 
 
 
 
 
 
Chief Financial Officer










EX-99.1 2 exhibit991-proformafinanci.htm EXHIBIT 99.1 Exhibit
Evoqua Water Technologies
Pro Forma Condensed Consolidated Financial Information
(Unaudited)

On April 9, 2018, WTG Holdings Coöperatief U.A. (“WTG”), a wholly-owned subsidiary of Evoqua Water Technologies Corp. (the “Company”), completed the sale of 100% of the corporate capital of Evoqua Water Technologies S.r.l., which includes the Company’s former operations in Italy (the “Transaction”), to Giotto Water S.r.l. (“Giotto”). The aggregate purchase price paid in cash by Giotto in the Transaction was €350,000, subject to certain earn-out adjustments to be paid by Giotto in connection with the realization of specified tax benefits relating to previous years.
The Transaction constituted a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial statements in accordance with Article 11 of Regulation S-X. The Transaction does not qualify as discontinued operations as it does not represent a strategic shift that will have a major impact on the Company's operations or financial results.
The accompanying unaudited pro forma condensed consolidated balance sheet as of December 31, 2017, gives effect to the Transaction as if the disposition occurred on December 31, 2017. The accompanying unaudited condensed consolidated statements of income for year ended September 30, 2017 and for the three months ended December 31, 2017, give effect to the Transaction as if the disposition had occurred on October 1, 2016. The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of the filing of this report on Form 8-K.
The unaudited pro forma financial information is based on financial statements prepared in accordance with U.S. generally accepted accounting principles, which are subject to change and interpretation. The unaudited pro forma condensed consolidated financial statements were based on and derived from our historical consolidated financial statements, adjusted for those amounts which were determined to be directly attributable to the Transaction, factually supportable, and with respect to the unaudited pro forma condensed consolidated statements of income, expected to have a continuing impact on our consolidated results. Actual adjustments, however, may differ materially from the information presented. Pro forma adjustments do not include allocations of corporate costs, as those are not directly attributable to the Transaction. In addition, the unaudited pro forma financial information is based upon available information and assumptions that management considers to be reasonable, and such assumptions have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma financial information is not necessarily indicative of what the financial position or income statement results would have actually been had the Transaction occurred on the dates indicated. In addition, these unaudited pro forma condensed consolidated financial statements should not be considered to be indicative of our future consolidated financial performance and income statement results.



The unaudited pro forma condensed combined financial statements have been developed from and should be read in conjunction with Evoqua’s historical audited consolidated financial statements and accompanying notes contained in the Company’s Annual Report on Form 10-K for its fiscal year ended September 30, 2017, and Quarterly Report on Form 10-Q as of and for the three months ended December 31, 2017.

Evoqua Water Technologies Corp.
Proforma Condensed Consolidated Balance Sheet
(Unaudited)
 
December 31, 2017
ASSETS
Historical
 
Pro Forma Adjustments
 
Pro Forma
 
(in thousands)
Current assets

$520,436

 

($2,612
)
 

$517,824

Cash and cash equivalents
80,250

 
(1,617)

(a)
78,633

Receivables, net
226,719

 
(143)

(b)
226,576

Inventories, net
128,306

 

 
128,306

Cost and earnings in excess of billings on uncompleted contracts
65,038

 
(417)

(b)
64,621

Prepaid and other current assets
19,287

 
(435)

(b)
18,852

Income tax receivable
836

 

 
836

Property, plant, and equipment, net
281,507

 
(324)

(b)(f)
281,183

Goodwill
320,927

 
(84
)
(b)
320,843

Intangible assets, net
329,568

 

 
329,568

Deferred income taxes
2,968

 

 
2,968

Other non‑current assets
23,503

 
(217)

(b)
23,286

Total assets

$1,478,909

 

($3,237
)
 

$1,475,672

 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
Current liabilities

$263,746

 

($2,033
)
 

$261,713

Accounts payable
114,489

 
(80)

(b)
114,409

Current portion of debt
11,033

 

 
11,033

Billings in excess of costs incurred on uncompleted contract
36,511

 

 
36,511

Product warranties
9,807

 
(621)

(b)
9,186

Accrued expenses and other liabilities
88,793

 
(1,332)

(b)
87,461

Income tax payable
3,113

 

 
3,113

Non‑current liabilities
862,441

 
(21)

 
862,420

Long‑term debt
777,900

 

 
777,900

Product warranties
6,497

 

 
6,497

Other non‑current liabilities
68,884

 
(21)

(b)
68,863

Deferred income taxes
9,160

 

 
9,160

Total liabilities
1,126,187

 
(2,054)

 
1,124,133

Commitments and contingencies
 
 
 
 
 
Shareholders’ equity
 
 
 
 
 
Total Evoqua Water Technologies Corp. equity
347,377

 
(1,183
)
(b)
346,194

Non‑controlling interest
5,345

 

 
5,345

Total shareholders’ equity
352,722

 
(1,183
)
 
351,539

Total liabilities and shareholders’ equity

$1,478,909

 
$
(3,237
)
 

$1,475,672










Evoqua Water Technologies Corp.
Pro Forma Condensed Consolidated Statements of Operations
(unaudited)
 
Year Ended September 30, 2017
 
Historical
 
Pro Forma Adjustments (d)
 
Pro Forma
 
(In thousands, except per share data)
Revenue from product sales
$
674,997

 
$
(1,149
)
 
$
673,848

Revenue from services
572,427

 

 
572,427

 
1,247,424

 
(1,149
)
 
1,246,275

 
 
 
 
 

Cost of product sales
(445,890
)
 
1,152

 
(444,738
)
Cost of services
(401,783
)
 
 
 
(401,783
)
 
(847,673
)
 
1,152

 
(846,521
)
 
 
 
 
 

Gross Profit
399,751

 
3

 
399,754

 
 
 
 
 

General and administrative expense
(169,617
)
 
610

 
(169,007
)
Sales and marketing expense
(142,441
)
 
340

 
(142,101
)
Research and development expense
(19,990
)
 

 
(19,990
)
Other operating income
2,361

 
1,242

(e)
3,603

Other operating expense
(860
)
 

 
(860
)
Interest expense
(55,377
)
 
(89
)
 
(55,466
)
Income before income taxes
13,827

 
2,105

 
15,932

Income expense benefit
(7,417
)
 
(58
)
 
(7,475
)
Net income
6,410

 
2,047

 
8,457

Net income attributable to
    noncontrolling interest
4,247

 

 
4,247

Net income attributable to Evoqua Water
    Technologies Corp.
$
2,163

 
$
2,047

 
$
4,210

 
 
 
 
 
 
Basic (loss) earnings per common share
$
0.02

 
$
0.02

 
 $ 0.04

Diluted (loss) earnings per common share
$
0.02

 
$
0.02

 
 $ 0.04







Evoqua Water Technologies Corp.
Pro Forma Condensed Consolidated Statements of Operations
(unaudited)
 
Three Months Ended December 31, 2017
 
Historical
 
Pro Forma Adjustments (d)
 
Pro Forma
 
(in thousands, except per share data)

Revenue from product sales and services

$297,051

 

($148
)
 

$296,903

 
 
 
 
 
 
Cost of product sales and services
(208,672)

 
(741
)
 
(209,413)

 
 
 
 
 
 
Gross Profit
88,379

 
(889)

 
87,490

General and administrative expense
(39,064)

 
90

 
(38,974)

Sales and marketing expense
(34,241)

 
75

 
(34,166)

Research and development expense
(4,653)

 

 
(4,653)

Other operating expense
(593)

 
60

(e)
(533)

Interest expense
(17,243)

 
(17)

 
(17,260)

Loss before income taxes
(7,415)

 
(680)

 
(8,095)

Income tax benefit
4,410

 

 
4,410

Net loss
(3,005)

 
(680)

 
(3,685)

Net income attributable to non‑controlling interest
708

 

 
708

Net loss attributable to Evoqua Water Technologies Corp.
($3,713)
 
($680)
 
($4,393)
Basic (loss) earnings per common share

($0.03
)
 

($0.01
)
 

($0.04
)
Diluted (loss) earnings per common share

($0.03
)
 

($0.01
)
 

($0.04
)

Evoqua Water Technologies
Notes to the Pro Forma Condensed Consolidated Financial Information
(Unaudited)

Note 1 - Basis of Presentation

The unaudited pro forma condensed consolidated financial statements give effect to the pro forma adjustments necessary to reflect the Italy disposition as if the transaction had occurred as of October 1, 2016, in the unaudited pro forma statements of operations for the three months ended December 31, 2017, and for the year ended September 30, 2017 and on December 31, 2017, in the unaudited pro forma balance sheet.

Note 2 - Pro Forma Adjustments

The unaudited pro forma condensed consolidated financial statements represent the following adjustments:

(a) To adjust cash and cash equivalents for the receipt of cash proceed from the Italy disposition of $430 (350 euro).
(b) To eliminate assets and liabilities as of December 31, 2017 related to the assets sold.
(c) To adjust shareholder's equity, which amount is primarily related to the accumulated retained losses in addition to the insignificant estimated gain on sale from the Italy disposition that would have been recorded on December 31, 2017.
(d) To eliminate revenues and expenses, including the impact, related to the operations of the assets sold for the three months ended December 31, 2017 and the year ended September 30, 2017.
(e) Included within Other operating income during the year ended September 30, 2017, and the three months ended December 31, 2017, were impairment charges related to Italy's building and intangible assets. The gain directly attributable to the Italy disposition is not expected to have a continuing impact on the Company's operations, and therefore, is not reflected in the unaudited pro forma condensed consolidated statement of operations for the year ended September 30, 2017 and the three months ended December 31, 2017.
(f) Italy's building and land were sold in separate transactions to other parties prior to the Italy disposition.



EX-99.2 3 exhibit992.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2

Evoqua and Giotto Enter Agreement for Distribution of Evoqua’s Memcor® UF & MBR Membrane Products

PITTSBURGH (USA), April 11, 2018 - Evoqua Water Technologies Ltd., a wholly-owned subsidiary of Evoqua Water Technologies Corp., and Giotto Water S.r.l. have entered into an exclusive agreement in relation to the distribution of Evoqua’s Memcor® product range in Europe. Under the terms of the agreement Giotto will have exclusive rights to market and sell Memcor ultrafiltration and Membrane Bioreactor (MBR) products in select territories throughout Europe.

“We are delighted to enter into this agreement with Giotto for our Memcor product range,” said Ben Soucy, VP/General Manager of Evoqua’s Memcor division. “As a global leader, Memcor has a rich history and strong installed base, especially our MBR offerings throughout Italy. We are excited to leverage the additional local reach and expertise of Giotto within Italy and other European markets we are not currently serving.”

Evoqua has more than 20 MBR installations operating in Italy, including one of the largest in Europe at Santa Giustina in Rimini, treating an average daily flow of 76 million liters (Rimini Case Study).

For many Italian municipalities, particularly in coastal areas that depend on good quality water to support tourism and agriculture, industries vital to their economy, high-quality treated water coupled with a small footprint afforded by the MBR technology makes it a leading choice for wastewater treatment in recent years.

Global MBR growth rates are largely driven by the need to process more wastewater in less space. As membrane technology has advanced it has become a reliable and accepted barrier for pathogen removal making MBRs an important platform for water reuse, providing water security for thriving economies.

“With this agreement, Giotto Water completes its products portfolio as a technology partner,” said Enzo Bina, Managing Director of Giotto Water Srl. “For Giotto Water this agreement is very important, as it allows us to combine our traditional equipment offering with one of the more strategic technologies in the Italian and European markets. The industry leading position of the Memcor membranes, coupled with the proven global references in municipal and industrial applications, will give us the possibility to provide a complete and state-of-the-art, full-service solution to our customers.”

In a separate transaction, Evoqua has sold all the remaining operations of its former Italy business, including customer contracts, to Giotto.

About Evoqua Water Technologies
Evoqua Water Technologies is a leading provider of mission critical water treatment solutions, offering services, systems and technologies to support its customers’ full water lifecycle needs. Evoqua Water Technologies has worked to protect water, the environment and its employees for more than 100 years, earning a reputation for quality, safety and reliability around the world. Headquartered in Pittsburgh, Pennsylvania, Evoqua operates 160 locations in eight countries and, with over 200,000 installations and 87 service branches, holds leading positions in the North American industrial, commercial and municipal water treatment markets, serving more than 38,000 customers worldwide. For more information, visit www.evoqua.com






About Giotto Water S.r.l.
GIOTTO WATER operates all over the world in the environmental field for over 40 years, with a wide product portfolio of specific technologies and solutions for treatment of water, wastewater and sludge for both municipal and industrial applications. Giotto Water’s goal is to improve the treatment processes, enabling Customers to optimize their systems by treating the water for re-use, by reducing the production of sludge and by proposing solutions for energy recovery and valorization of the sludge. Its portfolio includes, in addition to the traditional “SERNAGIOTTO” product line, systems for secondary biological treatment and tertiary filtration of wastewater treatment plants. Giotto Water’s mission is to satisfy Customer’s requirements, starting from the design phase through installation and aftermarket assistance, with its spare parts stock and experienced service team. For more information, visit www.giottowater.com
 

Contacts:
Media                        Investors
Kevin G. Lowery                Dan Brailer
724-772-1527 (office)                724-720-1605 (office)
724-719-1475 (mobile)            (412) 977-2605 (mobile)
kevin.lowery@evoqua.com            dan.brailer@evoqua.com