Questor Technology (QST.V) has signed a letter of intent to acquire Calgary-based waste gas combustion service company Emission Rx for up to C$3 million, the company said Thursday.
The deal would combine Questor's rental fleet of more than 100 incinerators with Emission Rx's field service support. It would also generate cross-selling opportunities through Emission Rx's installed base of over 800 units across five waste gas combustion product lines. A commercial arrangement with AeroTech Group of Companies would provide Questor with access to fabrication capabilities.
The consideration is composed of C$500,000 in cash at closing and C$500,000 in deferred cash payable 12 months after closing; 3.3 million Questor common shares worth about C$1.0 million, and an earn-out of up to C$1.0 million payable upon achievement of certain performance criteria.
A deal closing would resolve outstanding litigation between the two businesses. However, the LOI will terminate if a majority of Questor's directors are not re-elected at the Sept. 9 annual general meeting.